California Fires Insurance Claims Over 5,000 and Counting
NEW YORK - The Insurance Information Institute (III) reports so far a total of 5,980 claims have been filed from the southern California wildfires. In addition up to 2,000 homes have been damaged or destroyed by the southern California firestorms. According to III, the wildfires are expected to be at least the second most costly brushfire in California history. The Oakland Hills fire of October 1991 remains the most destructive brushfire in California history and the tenth costliest disaster in U.S. history. More than half of California's 12.5 million homes face wildfire dangers that pose a financial loss potential well in excess of $106 billion. The California Department of Forestry reports that more than 7.2 million California homes are categorized in the three highest fire risk levels - more than six million of which are located in urban areas. These include Los Angeles County, with 22.5% of all the homes in the county; Alameda County, with 45.2%; and San Diego County, with 59.5%. "It is important to remember that the insurance industry has confronted fires of this magnitude before, and while the current firestorms are clearly of historic magnitude, the industry has the ability to pay these claims," said Candysse Miller, executive director of the Insurance Information Network of California. Robert Hartwig, III's senior vice president/economist, says while this single event is unlikely to impact insurance rates for homeowners in the West Coast, the significant costs associated with these types of disasters nationwide can contribute to an overall rising of homeowner insurance rates. Given that catastrophe losses for 2003 stand at $9.4 billion, more than double the $4.1 billion for the same period last year, III estimates that homeowners' insurance rates will rise approximately 8% in 2004.