Allstate expects $1.1 billion loss from California fires
CNN
Allstate insurance said it expects a $1.1 billion loss from claims caused by the wildfires that swept through Southern California in January
Allstate Insurance says it will pay out $1.1 billion in claims caused by the wildfires that swept through Southern California in January. While the expected payout is significant, Allstate said Wednesday it was able to limit its losses partly by pulling back from the California market. Many insurers, including Allstate, have been canceling homeowners’ policies in many areas of California due to growing threat of wildfires — leaving many homeowners with more expensive and often limited alternatives, or with no insurance coverage at all. Allstate’s liability is a small fraction of the total insurance claims from the California fires in January: They are expected to come from 16,600 properties and forecast to cost the industry between $35 billion to $45 billion, according to CoreLogic, a research firm that tracks the costs of catastrophes like fires and hurricanes. The company announced the claims figure alongside its fourth-quarter earnings report late Wednesday, though the fires occurred in the first quarter and were not part of those financial results. Allstate recorded $2.1 billion in profit for the fourth quarter, which was up 34% from a year earlier and brought adjusted profit for 2024 to $4.9 billion. That growth came despite catastrophe claims losses of $315 million related to Hurricane Milton in the fourth quarter, and re-estimates for the cost of Hurricane Helene in September. Homeowners throughout California will likely see their homeowners insurance premiums climb in the wake of the fire. Earlier this week State Farm, California’s largest insurance provider, requested an emergency interim rate hike averaging 22% for homeowners citing a “dire” financial situation from the fires. State Farm has received more than 8,700 claims and paid over $1 billion to customers, a number that the company knows will rise, it said in a filing with state insurance regulators.
