Billions of dollars in damages – and untold emotional damage — on Wildfires raging in the Los Angeles area have been raging for years. Wildfires leveled neighborhoods, schools and shops, and insured losses were estimated at more than $20 billion, with an additional $60 billion in economic losses. The latest natural disaster represents another challenge to the state, with insurance companies raising their rates or pulling out of the entire market.
as Ian DrysdaleCEO of One Inc Karen Webster said, “People need to think about how insurance works, where they want to live and how they want to live – because the cost of living in some areas continues to rise.”
About California’s living economy: State Farm and other insurers canceled thousands of policies last year in the now-blighted Pacific Palisades neighborhood. Some residents choose to use the California FAIR Plan Associationwhich he described as the state’s insurer of last resort. The jury is still out when there are bailouts to help cover losses. But the average premium in the affected area, said Drysdale, increased by 24% in the affected fire zone, and even the average claim paid through the One Inc platform in that area grew by double digits every year.
The fires, he said, “will continue to push us all towards digital payments and instant digital payments … and use of AI for underwriting and claims.”
In many places, the cost of insurance makes it more difficult to afford a home – and there is a bit of confusion here, as with many mortgages. homely cannot be completed (and a property purchased) without insurance in place. The rule of thumb is that the annual cost of insurance is roughly 1% of the cost of the home – but if once-in-100-year events occur with greater frequency, it’s a given that the cost of insurance go up
As for One Inc’s own business, Drysdale noted that his company facilitates nearly $100 billion in insurance payments each year, with two-thirds of that amount consisting of claims payments. individuals and service providers.
“I expect we’ll see a big spike here at One Inc in payments in the LA area,” Drysdale said. The company allows instant payments, that is is now seeing strong demand from the claims departments of some of the 60 or so insurer clients who work with One Inc. with the state. Visa Direct and Mastercard Send have seen rapid growth as they help deliver the fastest flow of funds to affected individuals.
The tailwind to digital payouts is already in place, as One Inc brings two carriers in a week to switch to digital channels.and the The company’s network of 800,000 vendors also uses digital payments, which can save up to $15 on the cost of a check and eliminate the inefficiencies of paper-based payments.
Important Changes
Beyond the changes in the insurance industry, Drysdale said that as LA rebuilds, companies and contractors will use more recent standards than they have been. HISTORY in the area about 90 years ago when the city was built upwards around the film industry. There may be mass evacuations from LA, such as those fleeing the fire to find temporary shelter make the air their new circumstances are permanent.
“I think it’s going to drive people to safer places that are less expensive to insure,” Drysdale said. Rich people may continue to live on the coasts or in high-risk areas, but every day, middle-class individuals go where they can get approved and pay a mortgage.
“We don’t know what’s next,” Drysdale told Webster, adding that the fires will “cause everything to change how we think about our lives.”
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