At least three people are reported to have died on Tuesday, Feb. 6 as a result of the floods and mudslides that swept across Southern California.
Unprecedented levels of rainfall caused low-elevation sections of the Los Angeles area to flood, leaving destruction along its path of water and mud.
The region is becoming increasingly problematic for residents, as insurers flee the state — which is also highly prone to wildfires — causing the price of home and auto insurance to shoot up.
38 million people have been placed under flood alert, as heavy rains are expected to continue through Tuesday and the soil is oversaturated from the storm that began Sunday.
By Monday afternoon nearly 440,000 homes were left without electricity with some areas around LA reaching up to 11 inches of water.
The fire department responded to at least 130 flood incidents between Sunday and Monday, according to the LA Times, with Governor Gavin Newsom declaring a state of emergency.
Daniel Swain, a climate scientist with UCLA, called the storm “remarkable and in some ways historic,” as unseen levels of rainfall hit specific areas consistently.
With homes and vehicles around the area sustaining damage to diverse degrees, insurers covering the area will likely be hit with massive bills to cover.
The weather event, however, didn’t cause a major disturbance to insurance stock prices as of Tuesday. Progressive Corp (NYSE:PGR) was down 0.7% on Tuesday. Erie Indemnity Co (NASDAQ:ERIE) was up 0.8%. Fidelity National Financial Inc (NYSE:FNF) is up 0.1%.
The Causes And Consequences Of The California Insurance Exodus
The increasingly alarming rate of disastrous events in the Golden State has already become an exit alarm for some players in the California insurance market.
Allstate Corp (NYSE:ALL), one of the largest insurance companies in the country, decided last June to stop offering new policies in the state, which has also been battered by wildfires during recent years.
“The cost to insure new home customers in California is far higher than the price they would pay for policies due to wildfires, higher costs for repairing homes and higher reinsurance premiums,” said Allstar in a statement at the time.
The move followed that of competitor State Farm General Insurance Company, which stopped accepting new insurance…