As firefighters in California continue to battle multiple wildfires around Los Angeles, experts are sounding the alarm about a pending crisis in the insurance industry that would have enormous implications for the state’s recovery effort — and how homeowners rebuild. “I think we’re on the edge of a major financial crisis for the insurance industry,” says Daniel Aldrich, a Northeastern professor, director of the university’s Resilience Studies Program and co-director at the Global Resilience Institute.
Early estimates of insured losses from the Pacific Palisades fire are hovering around $10 billion, reports show. The total losses for Los Angeles are projected between $20 billion and $50 billion. Since 2019, more than 100,000 Californians have been dropped from their insurance carriers as the region sees more frequent and intense wildfires, according to a San Francisco Chronicle analysis. Insurance companies there have been raising rates, canceling or non-renewing policies or leaving the state altogether. It’s been the story for some time.
