"Yeah, it's pretty worrisome. They might start not insuring us, that's pretty scary," said Bruce Fowler, a resident of San Diego's Scripps Ranch neighborhood who was evacuated to Qualcomm Stadium this week.
Fowler's home narrowly escaped being destroyed in 2003, the last time fires swept Southern California with such ferocity. More then 3,600 homes were destroyed then, and insured losses surpassed $2 billion, according to the Insurance Information Institute.
So far, at least 1,500 homes have been lost across Southern California due to the fires. The number is expected to rise.
Insurers said they have sufficient reserves to pay claims that will likely surpass $1 billion.
"Insurance companies are in the business of taking these types of risk," state Insurance Commissioner Steve Poizner said.
"The companies are in gr! eat health and have substantial reserves," he said.
Poizner said he has talked to several insurance company chief executives in recent days and been assured they are taking steps to swiftly pay claims.
On Wednesday, he declared an insurance state of emergency, allowing out-of-state claims adjustors not licensed in California to come to the state to handle claims.
Paul Hopkins, chief executive of Farmers Insurance Group Inc., echoed Poizner's outlook.
"We don't set our rates or underwriting guidelines based on a single event," Hopkins said. "We have no desire nor has it been our past policy to start doing mass cancelations."
But the likelihood of companies taking a harder look at underwriting and pricing policies increases with the price tag of the fire, said Donald Light, a senior analyst with Boston-based financial consultant Celent. "The higher the final reckoning, the more likely companies are going to act."
Recent insurance history reinforces the skept! ics' view.
California had to form a special authority to se! ll earth quake coverage after insurers threatened to leave following the 1994 Northridge earthquake.
And after the 2005 Gulf Coast hurricanes, a number of companies, including Allstate and State Farm Fire & Casualty Co., raised rates, canceled or limited homeowners policies.
The companies' finances rebounded. After largely resolving claims from Hurricane Katrina, State Farm saw profits climb 65 percent to $5.32 billion in 2006, while Allstate had 2006 profits of $5 billion, nearly triple its 2005 level.
Full-year figures for 2007 are not yet available but some companies have seen earnings slip.
"I see no way they're not going to increase premiums," said Les Brown, a Los Angeles attorney who has sued insurers on behalf of policyholders.
"They are going to want to make up for the billions of dollars they will lose or more because of this disaster." - Associated Press Writer Scott Lindlaw in San Diego contributed to this report. Article Directory: http://www.articledashboard.com You can get more information about Business Marketing Plan at www.BizRave.com . Sean Milea writes about Search Engine Marketing Firms and other topics.
Source: http://www.timesheraldonline.com/todaysnews/ci_7269694
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see this?: Chronicle article on allsate
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