SACRAMENTO, Calif. (AP) — California regulators moved Friday to take over an insurance company that can’t pay out all claims following a massive wildfire that destroyed more than 13,000 homes. Merced Property & Casualty Company…
SACRAMENTO, Calif. (AP) — California regulators moved Friday to take over an insurance company that can’t pay out all claims following a massive wildfire that destroyed more than 13,000 homes.
Merced Property & Casualty Company was pushed to insolvency by the fire that sparked Nov. 8 and nearly destroyed Paradise and surrounding towns, state Insurance Commissioner Dave Jones said.
The department doesn’t know how many people the company insured or the total amount of claims following the fire, spokeswoman Nancy Kincaid said. But people will still have their claims paid through the California Insurance Guarantee Association.
“Protecting Camp Fire policyholders who have already suffered through so much was my first consideration,” Jones said in a statement, using the official name of the wildfire.
No one answered a phone number provided on Merced’s website.
“Due to the massive wildfire in Butte County, we have placed a moratorium on all new business,” read a message at the top of the site. “Our focus is on assisting those who have suffered loss from the catastrophic event.”
A judge is expected to approve liquidation proceedings on Monday and the company is not fighting it, Kincaid said.
The burned area was under evacuation orders for weeks and law enforcement has just started letting insurers in to see the property loss and damage, Kincaid said.
The fire killed 88 people and damaged more than 18,000 structures, making it the deadliest and most destructive wildfire on record in California.
No other insurers have reported insolvency, but Jones directed his department to conduct reviews of all California insurers to make sure they are properly managing their fire exposure.
After a major 2017 fire in Northern California wine country, many people who lost their homes found themselves underinsured as they looked to rebuild. Insurance claims after those fires hit $11.8 billion.
Jones has warned increasing risk from wildfires in California could prompt insurers to raise premiums or decline to sell policies entirely to homes in high-risk areas.