The wildfires in the Los Angeles area have had catastrophic consequences for the insurance industry. According to experts, with the total economic damage at 250 billion USD, insurance companies will be forced to pay out about 40 billion USD in compensation, “MIR 24” reports.

California's insurance sector is going through a serious crisis. Tightening consumer protection laws and more frequent natural disasters are forcing insurers to leave the regional market. A telling example was the departure of a large international insurance corporation, which three years ago stopped insuring ordinary homeowners, retaining service only for corporate and premium clients.

Statistics show a worrying trend: the number of active insurance policies from licensed companies has decreased by 340 thousand between 2019 and 2023. In light of recent events, one of the largest insurers is initiating a 22% increase in tariffs to compensate for losses from the January fires, as reported by the Financial Times.

The natural disaster, which began on January 7, was exacerbated by dry weather conditions and strong winds. The fire engulfed an area of more than 16 thousand hectares, destroying more than 12,3 thousand buildings, including luxury properties of celebrities - Hunter Biden, Paris Hilton and Mel Gibson. As a result of the fires, 29 people died.