India-Rae Harridge-Nutt
Of the four major fires burning across Los Angeles, the most hostile was in the Pacific Palisades, where 22,000 acres of land have been engulfed by flames.
The average annual household income in the Pacific Palisades is $192,669, which is significantly higher than America’s average household income. Despite this, the financial loss shared amongst the homeowners of the new desecrated Palisades still causes a huge dent in the homeowner’s finances, and for those struggling with insurance, it could have caused potential liquidation. This is largely due to issues with insurance companies that came into fruition in the middle of 2024, where companies were sending out non-renewing warnings for the majority of their Californian customers.
THE US GOVERNMENT CHOOSING TO IGNORE THE MOST DISADVANTAGED AND IMPOVERISHED IN SOCIETY IS LIKE A BROKEN RECORD
Whilst the destruction of homes is heartbreaking for the multi-millionaire homeowners, the homeless community in La, especially among Skid Row, a small neighbourhood synonymous with poverty, drug abuse and US government failure, have experienced an incomparable upheaval of their life. Skid Row possesses 5,000 people and cannot be neglected when discussing LA’s failure to mitigate for a natural disaster, one that is a yearly occurrence and only surprising in its magnitude and ferocity. Though, once again, the US government choosing to ignore the most disadvantaged and impoverished in society is like a broken record. Instead, the community around Skid Row attempted to house a few of the homeless, but others are left waiting for somewhere too relocate.
The fires increased by sixteen times their original size in 3 hours and were immensely difficult to contain, but these could have been blanketed much quicker than they were if LA was mitigated properly. The most responsible players for the damage done to both the rich and the poor in the destruction and evacuation of their homes are the LA government officials who did not prioritise mitigation and preparation, despite wildfires being common in this region.
SANTA YNEZ RESERVOIR WHICH COULD HAVE PROVIDED 117 MILLION GALLONS OF WATER TO AID FIREFIGHTERS
More specifically, the insurance companies in Los Angeles such as State Farm and the unreliable and over-priced California CARE plan, as well as Resnick’s immobilised Santa Ynez reservoir which could have provided 117 million gallons of water to aid firefighters.
Insurance companies started to send out significant amounts of non-renewal notices to customers months before the fires in efforts to rebuild financial loss due to high intensity of natural hazards that occur in California.
Non-renewal rates were 80% higher in postcodes that face the highest risk of natural disasters than those at low risk because companies were struggling to financially profit with the amount of natural disasters happening and assumed to happen in the near future.
The cuts cost before a huge event could happen, suggesting that worrying environmental pledges of the future for LA discussed amongst elites urged insurance companies to start decelerating the sheer quantity of customers that they have.
1600 HOMES HAD BEEN DROPPED IN THE PALISADES
This includes- most significantly- Californian’s largest homeowner’s insurance company, State Farm, which announced that it was starting to not renew 30,000 policies around late March. They claimed that they needed time to gain “financial strength” after supporting areas that have high exposure to natural disasters. Within a couple of months, a huge total of 1600 homes had been dropped in the Palisades.
As homeowners were undeniably complaining about being uninsured, State Farm suggested that they move onto California’s FAIR plan, which costs much more than traditional insurance companies do and yet covers less.
Average homeowners’ insurance costs $1250 per year compared to FAIR policy plan’s average price of $3.200 annual fee. Indeed, a 164% increase in FAIR plans was felt by the company after June 2024. It has received 3600 claims so far, and 22% of these are from the Palisades.
Despite the company being extremely expensive, it does not cover important natural hazards such as floods and earthquakes as well as human issues such as theft, personal liability and vandalism.
IS THE CALIFORNIA FAIR INSURANCE PACKAGE WORTH IT?
The biggest issue here is earthquakes because California sits on the San Andreas Fault and is home to 2/3rds of the nation’s earthquake risk. Indeed, every year, California gets 2 to 3 earthquakes of magnitudes 5.5 and above, which causes a moderate amount of loss and damage, raising the question of ‘Is the California FAIR insurance package worth it?’
The failure to mitigate involves high profile players, other than insurance companies, such as water companies and the most influential farmers in the region, like the Resnicks.
The Resnicks are the wealthiest farmers in the entirety of the US and pledge that their “calling” is “to leave people and the planet better than we found them.” But on the 5th December, one of the most important reservoirs- Santa Ynez- was not turned on, which would have provided 117 million gallon tons in aid, suggesting that their pledge to “leave the planet better than we found” is a ruse.
Farid Assume would agree that this is a ruse and argue that their promise of generosity to the world is a false proclamation when he filed a $30 million lawsuit against the Resnicks for Fraud and breach of contract after the company refused to pay the Assemi brothers in full of their 2018 Pistachio crop.
Resnick wanted to “destroy” the Assemi family for trying to establish their own operation.
WHO IS IT THAT IS IN CONTROL OF THE REGULATION OF AMERICAN LIFE?
Who is it that is in control of the regulation of American life, and why are fraudulent people in such high levels of power?Speaking of fraud, the new president-elect Donald Trump criticises water management and the Californian Democratic Governor Gavin Newsom on X:
“The fires are still raging in LA. The incompetent pols have no idea how to put them out.”
Whilst the president shows his passion towards how the fires are dealt with, he contradicts himself with the Trump Administration’s plan to raise tariffs on imports coming into the US, with a 25% increase on tariffs on goods coming from Mexico and Canada, as he claims that “the most beautiful word in the dictionary is tariff.”
Indeed, goods being taxed more is not good for homeowners as they are all being let go, especially as they are in high vulnerability places because insurance companies will struggle to maintain their clientele and any recovery needed to support LA because of the import tariffs put on goods to rebuild infrastructure and help to rebuild the community that has been burned down the palisades.
Duties in lumber have increased by 14.4% already in Canada from summer last year, this is only set to increase even more.
This was cause stagnation for the people of LA who have lost their homes, their businesses and their communities, as they cannot afford increased prices maximised by insurance companies or rebuild their houses themselves without insurance, setting the US working class back once again.
If it is true that when America sneezes, the rest of the world catches a cold, how will the failure to mitigate in California during these horrific fires influence the rest of the world on their own policies?
India-Rae Harridge- Nutt
Featured Image courtesy of Zyanya Citlalli via Unsplash. Image license found here. No changes were made to this image.
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