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Southern CA Fires- Extreme Santa Ana Winds


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8 hours ago, We’reTexas said:

Yep, definitely, we’ve been dealing with it. Although I’m not sure many are uninsured - you would go with FAIR, the state insurer of last resort, which to be fair (sorry), will probably be bankrupted by the is. But the point really was that California’s NIMBYist land use policies contributed to this by forcing sprawl. 
 

edit: let’s pile on Prop 13 as well, maybe the fire hydrants would have worked if the Palisades boomers paid their fair share!

in Louisiana, since Katrina, we have had a law that says that if you had your mortgage insurance at least three years, you could not be canceled saved for valid reasons like fraud or three claims in five years.   The second alternative means that three legitimate storms, causing damage enough to make a claim in five years allows them to cancel you through no fault of your own. But the three and five year rule protects the insurance company.

Enter the new business, friendly administration with the governor and insurance commissioner in the same party, and this year they changed the law and allowed insurance companies to back out of 10% of their policies per year for no reason.   Even better, they’ve now made it illegal to do discovery or inquire the reasons behind the decision to cancel 10% of the policies. It is now deemed essential that cannot be discovered legally. So now they can simply decide to cancel policies because you’re black because you’re gay because they don’t like that you live next to the coast, or because the previous owner made too many claims and you will never find out the true reason why, even if the reason would otherwise be illegal.

The claimed reason for passing this law is to give an incentive for more insurance companies to come to Louisiana.  Our  insurance commissioner until recently was a lobbyist for the insurance agency. This is not going to work out well for Louisiana and we are well on our way to massive numbers of people in our state being uninsured or having to pay $12k to $20k a year for insurance.

At some point, we are going to need some sort of national mortgage insurance similar to the FEMA flood policy,that will require slightly higher premiums in the parts of the country that do not suffer the immediate climate change threats to help subsidize the rest of the country. The problem is it looks like the rest is in increasing danger as well, with everybody facing new unforeseen flood dangers, and seemingly 100 a year storm in a new area every year

 

Edited by Gatorubet
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1 hour ago, Duane Moore said:

There is some truth in here in that a lot of rich, influential people are going to get pissed off and seek change, but Carolla got community-noted because the Pallisades actually majority-voted for Caruso and Malibu residents don’t vote in the LA mayoral election. 

As others have noted, the problem is just that there are some areas of the country that are prone to periodic catastrophic natural events, and if you build houses there, it is just a matter of time before they become at risk. See all the $10 million houses getting built on barrier islands on the east coast when hurricanes come along. SoCal has ecosystems that evolved in the context of regularly occurring burn cycles over millions of years. If you build a home in a canyon that doesn’t get a lot of rainfall and there are regular seasonal high winds, fires are going to happen periodically. 

Before giant shitstains like Carolla ever get to the permitting process, where MAYBE/PERHAPS they'll eventually have something worth complaining about, let's see him get a check from the insurance company and then hire an architect and contractor to begin the rebuilding process. So many people like him will learn that they're underinsured or they'll get screwed over by the maggots at State Farm and they'll never rebuild, and city permits won't be a factor AT ALL. Just a WAG but building standards have probably changed just a little since the day he purchased his 1960s removated ranch house -- that'snationwide and CA, in particular. These things are to be expected but he'll predictably blame it all on the government. 

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15 hours ago, Herbie Hancock said:

I’m curious how much water it is that you think it takes to put out a single structure fire.

 

As for the bolded, that’s a pretty strong assumption. Is there an ISO study or a fire suppression official that has come out and stated that is what they will do or have to do?

I don't have the first damned clue how much water it takes to put out one housefire.  It's apparently about 1.5x whatever the storage capacity is in Lost Creek.

And this is not a secret.  I mean, maybe realtors don't make it a point of mentioning it to buyers who are looking at houses in the area.  But it's not a secret.  It has been a topic brought before the Limited District repeatedly.  It's why the Dads' Club goes down once a year and clears out debris in the greenbelt (to the extent practicable).  And I know several people in the neighborhood raised it to their city councilperson while Lost Creek was still a part of the City of Austin.

Of course, that councilperson was Paige Ellis.  So they may as well have been talking to a corpse.

In any event, the fire department is well aware of the challenge, and that's why they don't put water on a house fire until they know it's not going to spread.  I know that first hand, because I've seen it happen twice on my street.  The second time--which happened 13 months ago--the fire department came out, made sure everyone was out of the house, and sat around for about a half-hour until they started putting water on the fire.  I actually had time to ask them what was going on, since they seemed to be at some leisure.  And that's exactly what they told me.

 

Final point: Lost Creek is not unique.  West Lake Hills has the same challenges, though not as great given that it is a larger community.  But anywhere you have hills, you're limited in your firefighting capacity by what is in storage and the speed with which that storage can be replenished.  And if you don't have electricity to run the pumps needed to refill that storage, which is the situation right now in parts of Los Angeles, you're really in a world of shit.

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One of the features that draws so many to live here is the weather.  Dry year round and cool along the coast is also what devastates us.   Last year at this time January to March it rained non stop as that’s usually when if it ever rains. So who knows wtf and why 

 

I’m sure the state will step in to help insurance companies   But that’s in addition to everything else. Just south of the fires in Palos Verdes they have the Portuguese bend land slide. Due to all the rains last year hundreds of homes have slid gas and electricity shut off roads collapsing and it moves a few inches a week. The state is stepping in to buy out everyone. 100s of millions there too 

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1 hour ago, raw dog said:

Can I get an unbiased breakdown of what preventative measures could've been pursued?

2014 Prop 1 progress or lack there of is a good place to start

https://bondaccountability.resources.ca.gov/p1.aspx#:~:text=The Water Quality%2C Supply%2C and,storage%2C and drinking water protection.

1st storage facility scheduled for 2027 completion.  

Edited by ChickenSandwich
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8 hours ago, HeHateMe said:

So does this, coupled with the last 36 hours, lead to a Covid like exodus to Colorado, Arizona and Texas?  At what point is enough enough?  Owning a $6MM property is one thing, self insuring it is another.  And what will the next few years bring with mud slides due to the lack of vegetation and brush?  I love visiting Southern California and have easy access to it.  I just can’t imagine living there.  If I owned one of the 50k or so houses, that are going to be a total loss, I would have to make a tough decision as to whether or not I want to rebuild and risk something similar.

We had a hell of a time getting insurance on our house in CO when we bought it last fall.  We ended up getting a policy that covers about 60% of what we paid for it.  IIRC, there was no one willing to do 100%.  I rationalized being OK with it because the land is by far the majority of the value of our place.  

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Just now, Beau Vine said:

We had a hell of a time getting insurance on our house in CO when we bought it last fall.  We ended up getting a policy that covers about 60% of what we paid for it.  IIRC, there was no one willing to do 100%.  I rationalized being OK with it because the land is by far the majority of the value of our place.  

You sir see it the right away. Structure burns? Fuck it, just get one of these.

image.thumb.jpeg.347256c14305c7dc464f0aab5cb0f43d.jpeg

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2 hours ago, Evil Bill Obrien said:

Privatized profits, socialized losses my friend, it’s the ‘Mercian way. Prepare your cornhole for a huge insurance industry bailout package

State Farm also reduced/pulled its coverage from California. It declined coverage renewal (with advance notice) on 70k properties last year, citing heightened risk they were restricted from being compensated for.

https://newsroom.statefarm.com/update-on-california/

https://newsroom.statefarm.com/state-farm-general-insurance-company-california-new-business-update/

State Farm had already lost $5B in their home insurance business in 2023, contributing to a $6B total loss.

Importantly, State Farm is a mutual insurance company. The customers jointly "own" the business. There is no shadowy, passive, external figure receiving dividend checks from the retained earnings. Maybe the legislative policy handicapping their ability to charge for risk commensurately has something to do with it, you think?

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11 hours ago, NorthLoop said:

I'm not sure how the insurance companies will financially recover from this

 

10 hours ago, Beau Vine said:

They will honestly need a bailout bigger than 2008 Wall Street.

We're about to get socialismed!

When insurance companies fail, they get liquidated and go into receivership. 

The companies owners/shareholders lose all their equity. 

If they are found at-cause for negligence/misconduct, they are liable for further legal claims. 

Normally, claimants get recovery through the Guaranty Associations - this is like the insurance version of FDIC. Those funds come from contributions paid out by the insurers themselves, not external “socialized” sources. 

Many recent examples alone of UPC, FedNat, SoFi, all operating in Florida and going out of business after the hurricanes. None were “bailed out”. UPC actually tried to exit the market but Ian hit them and took them out. Due to heightened hurricane risk, property insurance is very high in Florida….which should be the case in Cali except they werent allowed to.  

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2 hours ago, Duane Moore said:

This is a very helpful long post from someone who appears to be very non-partisan and appears to have some climate science credentials:

 

excellent summary which i agree with, tl/dr:

+++

Overall, climate change may be contributing to the fire danger of this event, but only if the warming/drying influence outweighs the potential reduction in Santa Ana winds. To me, that means climate change does not deserve primary billing (e.g., https://x.com/dwallacewells/status/1877030739344081343)

Fire suppression and the long-term build-up of fuels are not as much of an issue in the Southern California brush environment as they are in the Northern CA Forests, but our machine-learning wildfire intensity model indicates that fuel treatment would still reduce danger substantially.

Other than that, the main way these types of events can be mitigated in the future is via reduced human ignitions, potentially increased firefighting resources, and enhanced “home hardening” measures within fire-prone communities.

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3 hours ago, Duane Moore said:

This is a very helpful long post from someone who appears to be very non-partisan and appears to have some climate science credentials:

 

The second part bolded ensures the first part completely to contradictory. 

Edited by SydneyCarton
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9 hours ago, We’reTexas said:

Thanks, appreciate the insight from someone in the industry. We were very close to having to go with FAIR, but were able to avoid. From what I understand, FAIR has like $400M in reserves for claims and the state can charge (try to?) overages to accepted insurers, who can then pass along charges to policy holders. How would that even work out? This sounds like an epic clusterfuck. 
 

Oh, it's a Band-Aid on a hatchet wound no doubt but I don't know what can be done for people living in areas like California or Florida (Texas ain't far behind). You can't make companies offer insurance to high-risk properties. Climate change, or whatever you want to call it, is a thing. It has increased the number of catastrophic weather events that effect this country exponentially in the last 10+ years and it shows no sign of letting up. We've all felt rising insurance costs directly if you own homes and/or vehicles.

Florida enacted unprecedented updates to building codes post-Andrew and that's been extremely helpful. But there are still structures that pre-date 1991 that just hadn't been hit until more recently. Not sure how you engineer things that are impervious to fire. Most of the HNW carriers have wildfire defense systems in place that are free of charge. They closely monitor wildfires and if they have an insured structure in the path, they will send their private firefighting teams out to do all they can to save the property. They move shit around, cut back vegetation and other things. Then they'll water yards and structures. The last-ditch thing is they spray a flame-resistant/retardant foam all over the house that is highly effective. Then after the fire goes past, they come in and hose the foam off. They obviously don't have the capability to handle all homes.

This might be getting way into the weeds but insurance companies will look at risks pretty closely in high wildfire risk zones. Carriers and builders alike have reverse engineered homebuilding techniques to cut back the threat of flying embers igniting nearby structures. Soffits/eaves have been redesigned -- my understanding is they used to almost suck up embers like a vacuum and that area would just ignite. But, again, I don't know how you make something that is completely fire-resistant.

My wife's cousins grew up and lived in Northern California (Sacramento/Chico area). Her female cousin's home burned completely in either the Shasta fire that killed like 300 people 5-6 years ago or one of the other ones from a few years after that. Her male cousin's home outside Chico was miraculously the only house on his street -- one of the few in town that didn't burn down in fires last year. He had pretty severe smoke damage though. These homes pale in value to what's burning in LA right now, which is why this is going to be a disaster of epic proportions. I'm seeing estimates of $60B in potential losses now. That is an industry-altering figure.

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1 hour ago, RDCanecutter said:

Sounds like insurance might get suckier even in areas less disaster-prone.

No matter where you live, if you buy insurance you're subsidizing everybody else -- just at a much lower rate than those nearest to the "fuck-fuck" zone(s). Same reason why all of our insurance is going up even though you haven't had a claim (some of your neighbors did). 

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1 hour ago, 52-80 said:

 

When insurance companies fail, they get liquidated and go into receivership. 

The companies owners/shareholders lose all their equity. 

If they are found at-cause for negligence/misconduct, they are liable for further legal claims. 

Normally, claimants get recovery through the Guaranty Associations - this is like the insurance version of FDIC. Those funds come from contributions paid out by the insurers themselves, not external “socialized” sources. 

Many recent examples alone of UPC, FedNat, SoFi, all operating in Florida and going out of business after the hurricanes. None were “bailed out”. UPC actually tried to exit the market but Ian hit them and took them out. Due to heightened hurricane risk, property insurance is very high in Florida….which should be the case in Cali except they werent allowed to.  

You hear of insurance companies going insolvent but not much about reinsurance companies going the same way.  Seems like you should hear more about reinsurance going bankrupt if the system was working like it's supposed to.  So are reinsurers refusing to write for certain parts of portfolios or are the insurance companies just not buying enough reinsurance to cover all their assets? 

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5 minutes ago, 52-80 said:

Texas has twice the forestry of California and it is hotter every day of the year and the LA area specifically received more rainfall in the last 2 years than it has in over a decade, but whos counting

The flat topography we have makes it easier to fight fires and also doesn't contribute to the 60+mph winds that spread the CA fires. Makes a world of difference.

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