Street Calls of the Week
Investing.com -- The insured losses from the recent Palisades and Eaton (NYSE:ETN) Fires are projected to approach $28 billion, according to the high-resolution KCC US Wildfire Reference Model. This estimate includes claims from residential, commercial, and industrial properties, as well as automobiles. The losses are not only due to fire damage but also include smoke-related damage, time-element losses for residents in evacuation zones whose homes remained undamaged, guaranteed replacement cost coverage, and demand surge.
These losses are expected to be covered by typical insurance policies, including privately insured and FAIR plan policies. California authorities are likely to implement measures to stabilize the insurance market in the wake of these fires. These measures may include initiatives to speed up the rebuilding process, control cost increases, and prevent insurers from bearing excessive and uncovered losses.
The KCC model also considers the percentage of homeowners and business owners who have insurance coverage in the affected areas. While it is assumed that the majority of properties in the areas impacted by the fires are insured, either privately or through the FAIR plan, the $28 billion estimate does take into account a small proportion that are likely uninsured. The exact proportion of insured properties remains a primary area of uncertainty in these loss estimates.
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