Early CA Wildfires Have Insurers on Alert

The fire season has started earlier than usual in 2008 in California, with 30 active fires already blazing in the Golden State, causing insurers to be concerned.

"Until they get all these fire contained, we all walk on eggshells," said State Farm spokesman Lonny Haskins, who was on his way to an evacuation center near one of the latest fires in Napa County. He said State Farm, the largest writer of homeowners multi-peril in the state, has received an "extremely small" number of claims. Much of the fire damage has been limited to wooded acreage, not structures, he said.

A spokesman for Farmers Insurance Group, said the company has received six claims from the wildfires this year.

The fires haven't yet caused the massive insured losses experienced last October, when a series of fires in Southern California damaged thousands of homes and caused more than $2 billion in insured damage. One fire alone, the Witch Fire, caused more than $1 billion in losses. According to Tully C. Lehman of the Insurance Information Network of California, reports show that between 175 and 200 homes have been destroyed by the fires this year. The majority of damage came from the Humboldt Fire, Lehman said. Preliminary estimates were of insured losses of about $12.5 million.

Bill Packer, spokesman for the Association of California Insurance Companies, said 2008 is "shaping up to be a potentially bad year."

"The fire season is normally late summer, early fall but this year has started much earlier because the state is unusually dry," Packer said.

The top five writers of homeowners multi-peril in California, according to A.M. Best Co. state/line product information based on direct premiums written, were: State Farm Group, with a 20.2% market share; Farmers Insurance Group, with 16.8%; Allstate Insurance Group, with 13.3%; California State Auto Group, with 6.7%; and Auto Club Enterprises Insurance Group, with 4.3%.

Source: Source: AM Best | Published on June 24, 2008

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