Southern California is still trying to get back on its feet after last month’s deadly wildfires. Authorities said this week that the state’s last-resort property insurance provider needs a $1 billion boost from private insurance firms to help pay millions of claims made after the deadly fires.
Tuesday, the California Department of Insurance announced that the FAIR Plan, which helps Californians who can’t get private insurance, will be able to get $1 billion from California-based insurance companies to help pay victims.
It’s been more than a month since the Eaton and Palisades wildfires, which are now under control, killed at least 29 people, destroyed more than 37,000 acres of land, and burned down almost 17,000 homes. Cal Fire says that the fires are the second and third most damaging in California history, but they are still being looked into.
More than $700 million has already been paid out to members through the FAIR Plan. The state said last week that about 5,000 claims have been made because of those two fires alone.
“Survivors of wildfires can’t cash ‘what ifs’ to pay for rent and food, but they can cash FAIR Plan checks,” said Ricardo Lara, the commissioner of insurance for California.
Even so, experts have said that any assessments linked to wildfires would probably make home and property owners in California pay more for insurance, and insurers would probably choose to either drop policies or turn down new ones.
And some people don’t agree with the call for an extra $1 billion. A group called Consumer Watchdog is thinking about suing, saying that Californians might have to pay for the extra money needed for the FAIR Plan in the end. Carmen Balber, Executive Director of Consumer Watchdog, called Lara’s request a “bailout.”
“The FAIR Plan is in trouble because too many homeowners turned their policies in.” Balber said in a statement, “That’s why insurers are responsible for FAIR Plan losses.” He said private companies shouldn’t pay for the plan by charging Californians more.
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