California Wildfires Strain Insurers, Trigger Coverage Gaps

California's recent wildfires have caused significant financial strain on the insurance industry, with major companies like Travelers, Allstate, and State Farm reporting billions in losses. Travelers faces a $1.7 billion pre-tax loss, while overall industry losses could reach as high as $45 billion, exacerbated by the costly California FAIR Plan assessments. State Farm and Allstate have halted new policy offerings in the state, citing increased risk and regulatory challenges. The insurance market in California is under pressure as insurers struggle to manage escalating losses from natural disasters, leading to potential coverage gaps for residents. The state's stringent regulations and inability to adjust premiums further complicate the situation, affecting both insurers and policyholders. The California Department of Insurance maintains that the state remains a resilient market due to its economic strength and focus on climate resilience.