OLDWICK, N.J. October 22 (BestWire) — California insurers are bracing themselves for claims generated by 11 major wildfires reported across seven counties, which have prompted Gov. Arnold Schwarzenegger to declare a state of emergency.
Lonny Haskins, spokesman for State Farm Group, said it seems "like all of southern California is on fire." "Right now we are trying to help local authorities the best we can," Haskins said. "Our main concern is making sure people are safe. It's no time to hang around there."
According to catastrophe modeling firm Risk Management Solutions, up to 80,000 acres had been burned as of the afternoon of Oct. 22.
"It is truly a volatile situation at the moment," said Neena Saith, catastrophe response analyst for RMS. "It really is too early to begin speculating. We'll just watch how these fires progress and if they do, the insured loss is sure to increase."
Conditions do not favor a quick end to the fires, Saith said. On Oct. 22, high-speed Santa Ana winds and dry conditions were exacerbating the situation, and weather is expected to remain consistent at least until Oct. 25. Saith said the fires, affecting Los Angeles, Orange, Riverside, San Bernardino, San Diego, Santa Barbara and Ventura counties, continued to burn uncontrollably.
Thus far one of the most damaged areas appears to be Malibu, where a smaller fire has burned five homes and damaged others, Saith said. About 1,500 have been evacuated and more evacuations are expected, she said. More than 20,000 residents of Ramona, in San Diego County, have been evacuated. Qualcomm Stadium is being used to house evacuees. "It's the smaller fires that are doing the most damage so far because they are in the more populated, affluent areas," Saith said. Other wildfires are burning in more rural settings, she added.
Haskins said State Farm, the largest writer of homeowners multiperil and private-passenger automobile insurance in California, is deploying its catastrophe teams and sending personnel into the area. "The problem is, it's so difficult to establish one location for our teams; everything is so spread out," said Haskins, from the insurer's northern California office. "We do our best to help from up here. We have people going in a million different directions to help our customers."The company will provide information to policyholders for filing preliminary claims but Haskins said he doesn't expect to get any this early.
Allstate Insurance Group spokesman Peter DeMarco said the insurer is "doing everything we can to make sure we have the resources to help our customers." Catastrophe teams have been sent to San Diego and Los Angeles counties, DeMarco said. "Clearly, there is the possibility of some potentially disastrous scenarios because of these fires," DeMarco said. "We want to have the personnel in place to be able to help as best we can while we continue to monitor the developments."
Seven of the 10 most expensive wildfires in U.S. history have occurred in California, according to the Insurance Information Institute. Fires in San Diego and San Bernardino from Oct. 25 - Nov. 4, 2005 caused about $2.2 billion in property damage, the institute said. Those numbers have prompted property/casualty insurers to reassess the amount of risk they are willing to absorb. Some insurers require policyholders to take proactive steps to protect their houses from wildfire damage in order to maintain and renew homeowners insurance (BestWire, June 12, 2007).
State Farm Group currently has a Best's Financial Strength Rating of A++ (Superior). Allstate Insurance Group currently has a Best's Financial Rating of A+ (Superior).
In 2006, the top five writers of homeowners multiperil in California, according to A.M. Best Co. state/line product information based on direct premiums written, were: State Farm Group, with a 21.7% market share; Farmers Insurance Group, with 16.6%; Allstate Insurance Group, with 13.4%; California State Auto Group, with 6.3%; and USAA Group, with 4.5%.In 2006, the top five writers of private-passenger auto in California, according to A.M. Best Co. state/line product information based on direct premiums written, were: State Farm Group, with a 12.7% share; Mercury General Group, with 9.7%; Farmers Insurance Group, with 9.7%; Auto Club Enterprises Insurance Group, with 9.4%; and Allstate Insurance Group, with 9.3%.
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