The Los Angeles wildfires have exposed the deep-seated problems in the US's broken insurance industry, leaving homeowners struggling to recover from devastating losses. Jessica and Matt Conkle, who lost their midcentury ranch home to the wildfires that ravaged Los Angeles last January, experienced firsthand the frustration of dealing with an inadequate system.
After receiving an emergency response team from State Farm, the Conkles' insurance company, they thought they could see a glimmer of hope. However, their claim was bogged down in delays and denials, with them having to negotiate over the value of each lost possession with multiple adjusters before being offered a paltry sum. The process left them feeling shortchanged on item after item.
The Conkles are not alone in their struggles; recent reports from the Department of Angels, a non-profit set up by government experts in the wake of the fires, echoed their experiences. Almost eight out of 10 surveyed homeowners reported obstacles such as multiple adjusters, lowball estimates, fights over property lists, and poor communication.
The crisis facing the insurance industry is rooted in its inability to adapt to the increasing risks and costs of climate-driven natural disasters. Insurance companies have lobbied state regulators into granting steep premium increases, squeezing all but the wealthiest homeowners and leaving many under-insured.
Many providers have scaled back coverage in high-risk areas or stopped writing new policies altogether, leaving consumers in the hands of state-sponsored emergency insurance plans that often offer inferior coverage and struggle to stay afloat financially. In California, reliance on these last-resort options has soared.
The industry's profits are a stark contrast to its customers' struggles. The US insurance industry generated record profits of $169 billion last year and is on target for another bonanza year in 2025, despite the Los Angeles fires and other natural disasters.
Consumer advocates argue that the insurance industry's lobbying grip on state regulators and lawmakers has led to a failure of leadership and enforcement. The Consumer Federation of America's director, Douglas Heller, says that regulators have responded with "deference to insurance companies," which is a mistake that consumers are paying for.
The crisis extends beyond California, as wildfires, hurricanes, and tornadoes become more common and devastating. Last year, the global insurance industry saw $145 billion in underwriting losses from natural catastrophes, exceeding the 21st-century annual average by a staggering 54%.
State-sponsored emergency funds like the Fair plan are playing a bigger role, but experts say they are neither financially sustainable nor sufficient to cover catastrophic losses when they occur. Climate risk thinktank leader Dave Jones advocates for insurance companies to use their clout as institutional investors and divest from fossil-fuel companies that have driven the climate crisis.
As the industry struggles to adapt to the changing climate, regulators must take a more proactive role in ensuring fair treatment of homeowners who have paid for coverage. Homeowners deserve regular updates on the cost of rebuilding and credit for taking steps to protect their homes from catastrophic losses.
Ultimately, the broken insurance industry is a symptom of a broader crisis facing the US middle class: unstable home ownership and housing affordability. As climate volatility continues to worsen, the need for reform and a more equitable solution becomes increasingly urgent.
After receiving an emergency response team from State Farm, the Conkles' insurance company, they thought they could see a glimmer of hope. However, their claim was bogged down in delays and denials, with them having to negotiate over the value of each lost possession with multiple adjusters before being offered a paltry sum. The process left them feeling shortchanged on item after item.
The Conkles are not alone in their struggles; recent reports from the Department of Angels, a non-profit set up by government experts in the wake of the fires, echoed their experiences. Almost eight out of 10 surveyed homeowners reported obstacles such as multiple adjusters, lowball estimates, fights over property lists, and poor communication.
The crisis facing the insurance industry is rooted in its inability to adapt to the increasing risks and costs of climate-driven natural disasters. Insurance companies have lobbied state regulators into granting steep premium increases, squeezing all but the wealthiest homeowners and leaving many under-insured.
Many providers have scaled back coverage in high-risk areas or stopped writing new policies altogether, leaving consumers in the hands of state-sponsored emergency insurance plans that often offer inferior coverage and struggle to stay afloat financially. In California, reliance on these last-resort options has soared.
The industry's profits are a stark contrast to its customers' struggles. The US insurance industry generated record profits of $169 billion last year and is on target for another bonanza year in 2025, despite the Los Angeles fires and other natural disasters.
Consumer advocates argue that the insurance industry's lobbying grip on state regulators and lawmakers has led to a failure of leadership and enforcement. The Consumer Federation of America's director, Douglas Heller, says that regulators have responded with "deference to insurance companies," which is a mistake that consumers are paying for.
The crisis extends beyond California, as wildfires, hurricanes, and tornadoes become more common and devastating. Last year, the global insurance industry saw $145 billion in underwriting losses from natural catastrophes, exceeding the 21st-century annual average by a staggering 54%.
State-sponsored emergency funds like the Fair plan are playing a bigger role, but experts say they are neither financially sustainable nor sufficient to cover catastrophic losses when they occur. Climate risk thinktank leader Dave Jones advocates for insurance companies to use their clout as institutional investors and divest from fossil-fuel companies that have driven the climate crisis.
As the industry struggles to adapt to the changing climate, regulators must take a more proactive role in ensuring fair treatment of homeowners who have paid for coverage. Homeowners deserve regular updates on the cost of rebuilding and credit for taking steps to protect their homes from catastrophic losses.
Ultimately, the broken insurance industry is a symptom of a broader crisis facing the US middle class: unstable home ownership and housing affordability. As climate volatility continues to worsen, the need for reform and a more equitable solution becomes increasingly urgent.
this insurance industry is just plain crazy! think about it, $169 billion in profits last year while people are struggling to recover from devastating losses 
it's like they're getting paid to watch their customers suffer. and the fact that state regulators are giving them a free pass is just infuriating 
$145 billion last year alone! it's like they're caught off guard and don't know how to adapt.
meanwhile, we need better regulations and more transparency so homeowners can get the support they deserve. regular updates on rebuilding costs and credit for taking steps to protect their homes... it's not too much to ask, right? 
. I mean, $169 billion in profits is insane when you think about people struggling to recover from devastating losses. It's like they're profiting off people's misfortune. The Conkles' story is just one example of how the system fails. They were already dealing with stress after losing their home and then the claim process was just a headache 
. And what really gets me is that regulators are too deferential to insurance companies, like they're afraid to take on the industry. We need more transparency and accountability, for sure 
. The fact that state-sponsored emergency funds can't even keep up with losses is just a sign of how broken the system is 
.
. Climate change is making natural disasters more common and devastating, so it's time for insurance companies to adapt and innovate. Scale back on those premium increases and offer better coverage options in high-risk areas. It's just basic economics - if you're going to take risks, you need to offer rewards too 
. They need to be more proactive in ensuring homeowners get fair treatment. Regular updates on rebuilding costs and credit for taking steps to protect homes from disasters... it's the least they can do 
this whole thing is just so frustrating i mean the industry's making record profits but homeowners are still struggling to recover from these devastating losses it's like they're not even considered in the equation. and don't even get me started on the fact that insurance companies are scaling back coverage in high-risk areas or stopping new policies altogether it's just so unfair to people who have already taken a hit from the fires. 
. It's not right that insurance companies are making all this money while people are struggling to recover 
. The problem is that insurance companies have been taking advantage of homeowners by not adapting fast enough to climate change 
. They're just trying to make more profits than they need to, and it's leaving a lot of people in the dark about what's going on 
. We need to start looking at why they're not doing enough to adapt to climate change 
. Maybe they're being held back by regulations or lobbying from other industries 
. But we also can't just blame consumers for not taking care of their homes 
.
. We need more transparency and fairness in the system, so that people know exactly what they're getting and when 
. And maybe we need some new players in the market who are willing to take on climate risk 
.
. We need to start talking about affordable housing options and ways to protect homes from natural disasters 
. This is a huge issue that needs a comprehensive solution, not just Band-Aids for individual industries 
. We need some real change here, not just a band-aid solution for homeowners who've been left high and dry 
.
It's not too much to ask for fairness here. And by the way, I totally agree with Dave Jones about insurance companies divesting from fossil fuels. That's a step in the right direction! 
. The industry needs a major overhaul, but until then, we'll just have to keep fighting for our rights as consumers 
. We need more regulation and less "deference to insurance companies" 
