Total Insured Losses Near $7 Billion as Claims Surge
Los Angeles Wildfires: Farmers Insurance estimates $600 million in losses from the Los Angeles wildfires that swept through the region in January 2024, adding to the growing financial toll on insurers.
So far, insurance companies have paid out more than $6.9 billion to policyholders affected by the two most devastating wildfires in the area, according to the California Department of Insurance (CDI).
Rising Claims and Widespread Damage
As of the latest CDI data, insurers have received:
- 33,717 claims for home, business, and additional living expenses
- 5,597 auto insurance claims totaling $73 million
Heavy Losses Across Major Insurers
Several large insurers have reported losses exceeding $1 billion, including:
- Mercury Insurance Group: $1.6 billion–$2 billion in projected losses
- Travelers Companies Inc.: $1.7 billion in estimated losses
- USAA, Chubb, Allstate, and State Farm: Each exceeding $1 billion in wildfire-related losses
Additionally, the California FAIR Plan, the state’s insurer of last resort, has already paid over $914 million in claims. This led to a $1 billion assessment request from the state insurance commissioner to help cover the financial burden.
How Farmers Plans to Manage Losses
Farmers clarified that its $600 million loss estimate excludes:
- FAIR Plan losses
- A $250 million reinstatement premium payment
The Farmers Exchanges, which include Farmers Insurance Exchange, Fire Insurance Exchange, and Truck Insurance Exchange, emphasize that their strong capital reserves and reinsurance strategies will help them navigate the financial impact.
In a statement, Farmers reaffirmed its long-standing commitment to Southern California and its policyholders:
“With deep roots in Southern California, the Farmers Exchanges remain dedicated to supporting the recovery process for all their customers, employees, and communities impacted by the devastating fires.”
The company also reaffirmed plans to expand coverage options in California, despite the ongoing challenges in the state’s insurance market.
Economic Toll Could Top $164 Billion
Beyond insured losses, the total economic impact of the January wildfires could range between $95 billion and $164 billion, according to a report from UCLA.
For more updates on insurance industry developments, visit JacobiJournal.com.
Read the full California Department of Insurance report here.