Millions of dollars of property, up in flames in Los Angeles County. Some of that is recoverable through insurance but for others, this could mean a financial disaster because people lost some or all of their insurance coverage.
"When an insurance company experiences loss above what they've predicted for the year, then they're going to reassess what those rates are going to be in those wildfire zones. So that could in turn raise the rates, we don't know," said Michael Kiefer.
Kiefer is a southern California insurance broker and said in places throughout the state, insurance coverage could be influx and see rates rise. Others may be dropped by their insurance company.
The California Fair Plan is an option for people who've lost coverage and struggle to find it somewhere else. Since September 2020, policies have increased by more than 120% with the Fair Plan, showing the need for coverage throughout the state.
One of the top neighborhoods for coverage for the option is Pacific Palisades, which has largely been destroyed this week.
According to the Fair Plan, it's insurance exposure, what it could have to pay out in claims for just that area, is nearly $6 billion.
Because of the large number of policies canceled, California is also trying to expand insurance access for residents in wildfire prone areas.
Last week, we told you about a new plan from insurance commissioner Ricardo Lara that would force insurance companies to start increasing coverage in wildfire prone areas by 5% every two years. This is until they reach 85% of the statewide market share.
ABC 10News spoke with consumer advocates who worry that this could make insurance premium skyrocket.
Susman said for insurance coverage now, it's all about location.
"I think as an industry statewide, we're going to see a shuffling of premium and underwriting and carriers appetites depending on where they are," said Susman. "Some areas are going to be less expensive, some areas are going to be significantly more expensive."
Susman predicts there's going to be a bigger distance between coverage policies in urban versus wildfire-prone areas. He predicts in the future, more urban locations will have more favorable insurance rates.
