Insurance companies are preparing for losses of up to 10 billion dollars due to the wildfires in Los Angeles. Moody’s estimates that the losses for insurance companies will range in the ‘billions of dollars due to the high value of homes and properties in the affected areas,’ while Morningstar DBRS preliminarily predicts losses exceeding 8 billion dollars.
According to JPMorgan, the figure will approach 10 billion dollars. Beyond the immediate costs, one emerging issue is who will insure the new homes to be built. Some companies, such as Allstate and State Farm, have recently decided to stop insuring new homes in the state due to strict regulations on price increases, which make it difficult for companies to cover losses.
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