One year after LA fires; Still no justice for survivors

Photo Credit: Spectrum News

One year has passed since the Eaton and Palisades fires killed 31 people and destroyed 16,251 structures. Every Californian should pay close attention to the struggles currently facing the survivors of these fires. As the climate crisis worsens and the likelihood of catastrophic wildfires increases, the government’s botched response to last year’s fires and their indifference to victims is a warning sign for all of us. 

Regulators and politicians made a series of decisions last year that are setting a precedent for how our government intends to address the climate crisis. When climate disaster strikes, our government has shown it will prioritize the profits of big business over the needs of survivors. This orientation can be found in every aspect of the government’s response to the fires, but it is most obvious in the regulation of California’s homeowners insurance market. 

Never-ending Rate Hikes

Those affected by the fires have filed 42,121 insurance claims, resulting in insurance companies paying out $22.4 billion to policyholders. State Farm, the largest insurer in the state, was on the hook for about $7 billion in claims immediately after the fires. Alleging financial distress due to their claim obligations, State Farm asked the Insurance Commissioner for permission to raise their average rate for homeowners by 22%. In California, property insurance companies like State Farm cannot raise their prices whenever they want, they first must get approval from the elected Insurance Commissioner. 

Instead of negotiating a settlement where State Farm’s parent company footed most of the bill (they had a $145 billion dollar surplus for emergencies like this), the Insurance Commissioner allowed State Farm to push this cost onto average consumers by approving a rate increase of 17%. This rate request was unique in that it bypassed the typically lengthy rate approval process and was granted only a few months after the fires. 

Many insurers, encouraged by this turn of events, have followed suit with their own requests for rate increases. Mercury, CSAA, USAA, and Farmers Insurance Group have all requested rate increases of 6.9% (if they requested anything above 7% consumers would be allowed to pursue a mandatory public hearing and more regulatory oversight over the rate approval process). The state’s insurer of last resort, the FAIR plan, has requested a 35.8% increase in its rates.

Excluding the FAIR plan, all the companies mentioned make up 55% of the private homeowners insurance market in California. If State Farm’s rate approval was any indication of how regulators will respond to these additional rate requests, then consumers should expect insurance premiums across the market to skyrocket in the next few months.

As climate change continues to increase the frequency of catastrophic wildfires, why are ordinary people expected to pick up the tab for the damage and destruction left in its wake? These rate hikes are a way for big business to transfer the responsibility and cost of the climate crisis onto anyone besides themselves.

As the saying goes, “If you break it, you buy it”. Those responsible for breaking our climate should be the ones responsible for covering the costs of any mitigation or repairs associated with climate disasters. The fossil fuel industry, utility companies, and their billionaire owners broke our climate, it’s time they pay to fix it.

Insurance Companies Engage In Exploitative Business Practices 

While insurers demand higher rates for the promise of compensation after an emergency, the experience of fire survivors prove that insurers often break this promise. Hundreds of fire survivors have reported that the same insurers demanding rate hikes have yet to adequately compensate them for damages caused by last year’s fires. Groups like the Eaton Fire Survivors Network have called on the Insurance Commissioner to put a freeze on rate hikes until fire survivors are fully compensated by their insurers. 

So far neither the current Insurance Commissioner nor any Democratic or Republican candidate for the 2026 Insurance Commissioner race have pledged to freeze rate hikes.

According to a survey conducted by the Department of Angels, about 55% of fire survivors whose homes were not destroyed, but were structurally damaged or contaminated by smoke, reported that their insurers are coming up with insurance estimates far below the actual costs needed for repairs. Around 46% of those same survivors reported that their claims have either been partially or fully denied. 

Fire survivors are learning that private insurers use internal claim procedures and rules designed to pay policyholders as little as possible. Adjusters are explicitly instructed to never put denials in writing and are pressured by management to offer low settlements. 

Insurers prematurely cut off compensation for survivors whose houses are contaminated with carcinogens, forcing homeowners back into dangerous living situations. Instead of gauging the true degree of contamination in a household, insurers rely on sketchy research funded and designed by the insurance industry to reach the exact conclusions they desire. 

Even though similar stories occur after every major wildfire, with regulators usually turning a blind eye, what is unique about the Los Angeles fires has been the spawning of a mass movement of survivors who are successfully forcing the hand of regulators. 

After six months of grassroots organizing and a public pressure campaign by fire survivors, the Insurance Commissioner opened up an investigation into State Farm’s handling of claims. In November, Los Angeles County opened up its own investigation into State Farm as well. 

There are a number of other insurers who face the same allegations as State Farm, many of whom are currently requesting a rate hike or have already been approved, but none are facing major investigations into their business practices. 

The next Insurance Commissioner must work hand-in-glove with fire survivors to hold insurance executives accountable for exploitative business practices. The Department of Insurance must freeze rate hikes until they vigorously pursue the complaints of fire survivors, open up investigations into the largest home insurers, and hold the entire industry accountable for every dollar they refuse to pay out. Only then can justice be achieved for fire survivors.

Government Must Put People Before Profits

Everyone of us will eventually be a victim of the same governmental response when the next climate disaster hits, unless we take action now. We should take our cues from the fire survivors who, having lost their homes, neighborhoods, and loved ones, did not fall to despair but instead began to fight for justice. 

In an era of climate catastrophe, justice requires an entirely new system. We need to organize and fight for a government where working people are in charge and can plan the economy to meet the needs of the people and planet, not the billionaires. If we want to overcome the climate crisis, then building a Socialist government where people are prioritized instead of profits must be on the agenda.