A Trillion Dollars’ Worth of Damage
Just over the past 12 months alone across the nation, there has probably been more than one trillion dollars’ worth of damage from firestorms, hurricanes, and floods in California, Texas, Florida, North Carolina, and other states. At some point, the bailout funds may run dry from either insurance companies or government agencies.
There’ s potentially several hundred billion dollars’ worth of property damage in just Los Angeles County alone from the recent firestorm in January that hit Pacific Palisades and Eaton in Altadena, California particularly hard.
While the Palisades, my former hometown for a decade, got the most national publicity with approximately 6,800 properties destroyed, it was Eaton, near Pasadena, that had even more properties destroyed with an estimated 9,400 properties. Just in these two regions alone, there were more than 16,200 properties severely damaged or completely destroyed.
By comparison, the Los Angeles Riots of 1992, following the Rodney King court verdict, caused $ 1 billion in property damage at 1,100 property locations.
Insurance Rate Hikes
We’ ve all seen significant insurance rate hikes across the nation in recent years, especially in states like Florida where some basic homeowners insurance policy premiums for averagepriced homes are near $ 1,000 per month.
State Farm, the largest homeowners insurance company in California, did cancel upwards of 1,600 homeowners insurance policies in Pacific Palisades on or before July 2024, as reported by CBS News. This was just six months before the horrific firestorm hit this beautiful Palisades region.
However, State Farm, and probably most other insurance companies in California and elsewhere, is suddenly starting to request“ emergency rate hikes” to cover their financial losses. The premium rate hike request from State Farm to California state officials is near + 22 % for homeowners insurance and up to as high as + 38 % for renter’ s insurance.
Are Your Pools and Agencies Liquid or Not?
Water causes more home damage each year than anything else. As such, water effectively floods the insurance pools more than anything else in spite of firestorms getting more recent national coverage.
Will your insurance or a separate government agency cover your financial losses? Who is more financially solvent these days the insurance agency or the homeowner?
The“ liquid” term when used in finance translates as being flush with cash. Conversely, illiquid means that a person or entity doesn’ t have much access to available cash that’ s fairly easy to access.
Let’ s take a closer look at the financially insolvent insurance or government agencies are these days:
FEMA( Federal Emergency Management Agency) is technically insolvent or broke, as per FEMA themselves. The National Flood Insurance Program( NFIP managed by FEMA) was described as being more than $ 20 billion in debt in January 2024 at a panel hearing held by the U. S. Senate Banking, Housing and Urban Affairs Committee.
“ The Small Business Administration’ s( SBA) disaster assistance loan program is out of money after hurricanes Helene and Milton struck parts of the U. S., the agency has announced.” ZeroHedge
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