How will the California wildfires shape the home insurance industry?
Kyle Grillot/Bloomberg via Getty Images
(LOS ANGELES) — The multiple wildfires raging in California are being described by eyewitnesses as “apocalyptic.” While the cost in human suffering is immeasurable, it may take weeks or longer for the true economic toll to be realized.
AccuWeather estimated $52 billion to $57 billion in damage as of Wednesday afternoon, but state officials warned that the number is expected to rise as the unprecedented fires put thousands more homes at risk.
The five wildfires tearing through the County of Los Angeles hit many California homeowners who were already struggling to find a company willing to insure their properties. At least 10 major insurers have either left or reduced coverage in California in the past four years. During that time, the number of homeowners signing up for the state’s insurer of last resort has doubled, officials said.
In the past two years, insurers including Allstate, American National, The Hartford and State Farm stopped issuing new fire policies for California homeowners. In some instances, residents said, the insurers would not renew existing policies because of the ongoing risk of damage from wildfires.
“The scenes from the area are heartbreaking, and our thoughts are on the individuals and communities impacted, as well as those that remain under threat,” State Farm said in a statement to ABC News. “We want our customers to know that, when it is safe to do so, they can and should file a claim. Agents can also help and, if needed, give customers more time to pay their premium. Our teams are standing by to assist.”
Allstate stopped issuing new homeowner policies in the state in 2022 and said last year that it would reverse its decision if it was allowed to account for the costs of reinsurance when setting rates.
The Hartford stopped writing new homeowners policies in the state on Feb. 1, 2024. American National stopped offering policies in the state on Feb. 29, 2024. Those companies did not respond to ABC News’ request for comment on the fires or on coverage going forward.
Just days before the first wildfire broke out Tuesday in LA’s affluent Pacific Palisades neighborhood, the California Department of Insurance unveiled new regulations that would soon require insurers to increase home coverage in areas prone to wildfires. The policy would not be retroactive and would only apply to new policies going forward.
Part of a home insurance reform package, the regulations will also allow insurers to charge homeowners higher premiums to protect themselves from catastrophic wildfire claims, the documents said. It will be the first time in the state’s history that insurers can include the cost of reinsurance in their premiums, though it is a common practice in other states.
Critics of the rule say it could hike insurance premiums by 40% and doesn’t require new policies to be written at a fast enough pace.
The new rules are set to take effect at the end of January following a 30-day review period; but for many Californians, that regulation will come too late.
One example is the Levin family.
The fast-moving wildfires threatened Lynn Levin Guzman’s childhood home in Eaton, California. The 62-year-old emergency room nurse said, in a post on TikTok, that she snuck back to an evacuation zone to attempt to protect the home by spraying it with water from a hose because her parents’ fire insurance was cancelled.
“They’re 90 years old. They’ve lived in this house for 75 years, and they’ve had the same insurance,” Guzman told ABC7 Eyewitness news, “and the insurance people decided to cancel their fire insurance.”
“So, thank you California insurance companies for supporting residents who pay taxes and love California,” she said.
“And they wonder why people are leaving California,” she added.
An apparent lack of viable insurance options has a growing number of California homeowners flocking to the FAIR Plan, the state’s insurer of last resort. Meant to be a stopgap rather than a permanent replacement, it does not offer comprehensive policies. According to state officials, the number of policies under the FAIR Plan has more than doubled from 2020 to 2024 to 452,000.
President-elect Donald Trump called out the insurance industry on Truth Social on Wednesday, posting, “The fires in Los Angeles may go down, in dollar amount, as the worst in the History of our Country. In many circles, they’re doubting whether insurance companies will even have enough money to pay for this catastrophe.”
President Joe Biden also on Wednesday approved a major disaster declaration for California, making federal funds available for those who’ve lost property. That assistance includes low-cost loans to cover some uninsured property losses, according to the Federal Emergency Management Agency.
The FAIR Plan predicts that it will be able to pay out.
“We are aware of misinformation being posted online regarding the FAIR Plan’s ability to pay claims,” FAIR Plan spokesperson Hilary McLean said in a statement.
“It is too early to provide loss estimates as claims are just beginning to be submitted and processed,” McLean wrote, noting that the plan is prepared for this kind of a disaster and has payment mechanisms, including reinsurance, to cover claims.
State officials say they are considering passing a temporary year-long moratorium on non-renewals in areas recently burned.
Insurance Commissioner Ricardo Lara said in a statement, “Insurance companies are pledging their commitment to California, and we will hold them accountable for the promises they have made.”
(NEW YORK) — Harvey Weinstein is suing New York City and its Department of Correction, alleging negligence and failure to provide adequate care.
Weinstein is being held at Rikers Island while he awaits a new trial on sexual assault charges.
Weinstein has been diagnosed with bone cancer, according to his associates.
His lawsuit seeks monetary damages.
In a statement, his attorney, Imran H. Ansari, claimed the prison was failing to provide Weinstein with adequate medical care.
“When I last visited him, I found him with blood spatter on his prison garb, possibly from IV’s, clothes that had not been washed for weeks, and he had not even been provided clean underwear — hardly sanitary conditions for someone with severe medical conditions and susceptibility to illness,” Ansari said. “I questioned whether I was in a prison facility that is supposed to be managed in accordance with our constitution, or a gulag where the prisoners are treated like animals.”
Ansari accused the prison of “medical negligence” and claimed “it amounts to cruel and unusual punishment.”
“The disregard to Mr. Weinstein’s medical needs is an example as to why Rikers Island has been under the intense scrutiny by officials and the public, and is the subject of federal oversight,” Ansari said. “But, we don’t live in a country where a prisoner such as Mr. Weinstein must endure such harsh and draconian treatment, and disregard to his medical needs, without recourse under the law.”
(NEW YORK) — An American Airlines flight departing New York’s LaGuardia Airport on Thursday evening had to divert to nearby John F. Kennedy International shortly after takeoff after a reported bird strike caused damage to one of the aircraft’s engines.
The aircraft, powered by its second engine, landed safely and without incident shortly after 8 p.m., the Port Authority New York and New Jersey said. There were no reported injuries.
“The aircraft landed safely at JFK where it will be inspected by our maintenance team,” American said in a statement. “We are grateful to our crew for their professionalism and apologize to our customers for the inconvenience this may have caused.”
Charlotte, North Carolina-bound flight 1722 had 190 passengers and six crew members on board. The aircraft was an Airbus A321. Passengers were expected to board another flight to Charlotte on Friday morning.
(NEW YORK) — A University of Pennsylvania graduate has been charged with murder in the targeted attack of Brian Thompson, the CEO of major insurance group UnitedHealthcare who was fatally shot outside a Midtown Manhattan hotel ahead of an investor conference, according to the NYPD.
Luigi Mangione was charged in the fatal shooting after he was arrested Monday in Altoona, Pennsylvania, after an individual at a McDonald’s recognized him from the wildly circulated images of the suspect sought in the shooting.
Mangione faces charges in New York and Pennsylvania
Mangione faces second-degree murder, possession of a loaded firearm, possession of a forged instrument and criminal possession of a weapon charges in New York, according to according to an online court docket.
The Manhattan District Attorney’s office confirmed the charges.
The forged instrument is the fake NJ driver’s license he allegedly used to check into the hostel on the Upper West Side.
Mangione remains in the custody of the Pennsylvania Department of Corrections pending his extradition to New York.
Mangione, 26, was initially identified as a “strong” person of interest in the shooting death after he was apprehended at the McDonald’s in Pennsylvania, New York City Mayor Eric Adams said during a press briefing in New York on Monday.
Mangione was eating at the McDonald’s Monday morning when an individual thought he looked suspiciously like the shooting suspect and alerted an employee, who called police, authorities said.
He was carrying a firearm and suppressor “both consistent with the weapon used in the murder,” NYPD Commissioner Jessica Tisch said during the press briefing earlier Monday. The gun “may have been made on a 3D printer,” police said.
He also had “multiple fraudulent IDs,” including a fake New Jersey ID matching the ID the suspect used to check into his New York City hostel before the shooting incident, Tisch said. He was carrying a U.S. passport that identified him as Luigi Mangione, police said.
Police also recovered clothing, including a mask consistent with those worn by the wanted individual, as well as a three-page “handwritten document that speaks to both his motivation and mindset,” she said.
He was in possession of a ghost gun capable of firing a 9mm round and will face gun charges in Altoona, NYPD Chief of Detectives Joseph Kenny told reporters during the briefing earlier Monday.
He has been charged in Pennsylvania with five crimes, including carrying a gun without a license, forgery, falsely identifying himself to authorities and possessing “instruments of crime,” according to a criminal complaint.
The charging document alleges that Mangione lied about his identity to police and carried the ghost gun without a license.
When Altoona police asked him if he had ever been to New York City, Mangione started shaking, according to the charging document. He didn’t answer the question directly, police said.
Police said they are working to develop a full sense of his timeline in Pennsylvania and how long he has been in Altoona.
The NYPD sent detectives to Altoona to interview him and are going through the recovered writings and his social media, police said.
“It does seem that he had some ill will toward corporate America,” Kenny said.
A Goodreads account that appears to belong to Mangione left a four-star review on Ted Kaczynski’s “Industrial Society and Its Future” — more commonly known as the “Unabomber manifesto” — and described Kaczynski as “a violent individual — rightfully imprisoned — who maimed innocent people. While these actions tend to be characterized as those of a crazy Luddite, however, they are more accurately seen as those of an extreme political revolutionary.”
As investigators sift through Luigi Mangione’s online activity, they are examining multiple social media posts that suggest he may have suffered a major back injury including a photo of an x-ray of a spine posted on X and at least two books about back injuries on his Goodreads profile.
A source confirmed to ABC News that the Goodreads account is part of the law enforcement investigation.
Mangione has ties to San Francisco and his last known address was in Honolulu, Kenny said. In November 2023, Mangione was arrested in Honolulu for trespassing in a Hawaii State Park, court records show. He pleaded no contest and was ordered to pay a $100 fine.
He has no prior arrest history in New York, Kenny said.
Mangione was born and raised in Maryland, Kenny said.
Following his arrest on Monday, the Mangione family released a statement saying, “Our family is shocked and devastated by Luigi’s arrest.”
“We offer our prayers to the family of Brian Thompson and we ask people to pray for all involved,” Maryland Republican Delegate Nino Mangione, who represents parts of Baltimore County, wrote on X on behalf of the family.
Luigi is a 2016 graduate of the Gilman School, a private high school in Baltimore, where he was the valedictorian of his graduating class, according to the school’s website. The school said in a statement that Mangione’s “suspected involvement in this case is deeply distressing news on top of an already awful situation.”
“Our hearts go out to everyone affected. Here on campus, our focus will remain on caring for and educating our students,” the statement continued.
Mangione is a May 2020 graduate of the University of Pennsylvania, according to a school spokesperson. He studied computer science and earned bachelor’s and master’s degrees in engineering from the Ivy League institution.
Following his graduation, Mangione worked as a data engineer at online car marketplace TrueCar, Inc. beginning in November 2020, according to a LinkedIn account that appears to belong to Mangione.
A representative for TrueCar said that Mangione stopped working for TrueCar in 2023.
A classmate who graduated from Gilman with Mangione, told ABC News that “he is the last person I expected to be involved in something like this.”
“He was an incredibly intelligent, humble and kind person,” the classmate said. “He seemed like a very bright guy with a bright future.”
About six months ago, the classmate said he was notified by other classmates that Mangione’s family was “inquiring about his whereabouts.”
“I didn’t hear anything about him until today when all the news dropped,” they said. “It really sucks for his family, who must be going through it right now.”
The Mangione family released a statement saying, “unfortunately, we cannot comment on news reports regarding Luigi Mangione. We only know what we have read in the media. Our family is shocked and devastated by Luigi’s arrest. We offer our prayers to the family of Brian Thompson and we ask people to pray for all involved. We are devastated by this news.”
New photos of suspect released
Police have said the suspect appeared to be lying in wait outside the Hilton hotel on Wednesday in what they said was a “premeditated” attack. The shooter arrived at the scene about five minutes before Thompson before shooting the victim in the chest around 6:40 a.m., police said. The suspect is believed to have left New York City following the shooting, police said.
NYPD officials released new images this weekend of the suspect being sought in the shooting in the back of a taxi, where he could be seen peering through the open slider in the partition between the seats.
Another photo appeared to show the man walking by the window of a cab.
Backpack contained Monopoly money
Police found a backpack believed to belong to the suspected shooter in Central Park on Friday evening, police sources told ABC News. The backpack contained fake money from the game Monopoly and a Tommy Hilfiger jacket, sources said.
The backpack was found after NYPD deployed an army of officers and drones to conduct a grid search, police sources said earlier.
As of Saturday, three days after the shooting, sources close to the investigation told ABC News the New York Police Department is making progress toward identifying the gunman but, as of now, still has not done so.
On Friday, police said they believed the gunman left New York City following the shooting — ditching his bike on the Upper West Side and taking a taxi to a Port Authority bus facility at 178th Street. Police said they believe he boarded a bus there because they did not see him on video leaving the facility.
Suspect stayed at hostel
The NYPD released on Thursday new photos of the suspect, seen without a mask, while asking for the public’s help in identifying him. The images were taken from a surveillance camera at the HI New York City Hostel on Manhattan’s Upper West Side. Police had obtained a warrant to search after coming to believe the suspect stayed there, sources told ABC News.
Police were able to find an image of the suspect without his face mask because he was flirting with the woman who checked him into the hostel, police sources told ABC News.
As he stood at the check-in desk, the sources said the woman asked to see his smile. The suspected shooter obliged, pulling down his mask long enough for the surveillance camera to capture his face.
It appears the suspect shared a room with two other men, according to police sources.
The suspect likely checked into the hostel on Nov. 24, checked out and then checked back in again on Nov. 30, according to sources. It’s not clear when the surveillance image was captured.
The suspected shooter checked into the hostel using a New Jersey license that wasn’t his own, according to police sources. Detectives ran the name and found it did not resemble any known photos of the suspect or other evidence amassed so far, the sources said.
Suspect arrived in NYC 10 days before shooting: Sources
The suspect came to New York City on Nov. 24 on a Greyhound bus, when a surveillance camera at Port Authority Bus Terminal caught his arrival at 9 p.m., law enforcement sources told ABC News.
The inbound bus originated in Atlanta but it was not immediately clear where the suspect boarded. The sources said he was spotted on board in Washington, D.C., so he boarded there or somewhere between D.C. and Atlanta.
Both Greyhound and the parent company of the hostel, Hostelling International USA, said in a statement that they are “fully cooperating with the NYPD” but cannot comment further due to the active investigation.
The 10-day period has been the focus of investigative efforts. Police have collected a lot of video of the suspect all over the city — in the subway, in cabs, in a McDonald’s, according to sources. Each place he paid with cash and he made sure to keep his mask on, according to sources.
Whereabouts day of the shooting
Police have released photos of the suspect in a mask, captured at a Starbucks near the hotel before the shooting, according to New York ABC station WABC. He was described by police as wearing a light brown or cream-colored jacket, a black face mask, black and white sneakers and a “very distinctive” gray backpack.
Sources told ABC News the suspected shooter was also seen on video much earlier, at 5 a.m. the day of the shooting, near the hostel carrying what appears to be an e-bike battery.
New cleared CCTV video shows a man who appears to be the suspect walking west on 55th Street at 6:19 a.m. The video shows him stoop down as he appears to momentarily drop an object on the garbage before continuing to walk.
Writing discovered on shell casings
Detectives later discovered writing on the shell casings found at the scene where Thompson was gunned down, police sources told ABC News.
Detectives were working to determine whether the words were meant as a message from the shooter and a hint at his motive.
Written on the shell casings were the words “deny,” “defend” and “depose,” according to sources.
Other evidence: cellphone, water bottle, candy wrapper
After the shooting, the suspect fled on foot into an alley, where a phone was recovered, according to Kenny. He then fled on an e-bike and he was last seen riding into Central Park at 6:48 a.m., police said.
Police released photos of the suspect holding a firearm and on a bike.
Detectives have also retrieved a water bottle and candy wrapper from the area where he was apparently waiting, law enforcement sources said. After analysis, NYPD investigators believe the cellphone, candy wrapper and water bottle are linked to the shooter, police sources said.
Investigators believe they were able to score DNA samples from several pieces of the evidence, law enforcement sources told ABC News on Friday. The samples are currently at the NYC Office of the Chief Medical Examiner to be run through databases for a possible match, the sources said. That process could take a couple days.
At the same time, NYPD detectives are working with the U.S. Marshals Service to try and track down the shooter along with the FBI, which has the most sophisticated technology for retrieving usable data from cellphones, sources said.
Professional killer appears unlikely
The victim’s hotel room has already been accessed by investigators, whose top priority is determining Thompson’s most recent conversations and movements, sources said.
The working theory among detectives right now is that the shooting was carried out by someone who is not a professional killer because too many “mistakes” were made, sources said. Hitmen typically don’t carry cell phones to their hits and the shots were fired from a distance that would be considered “too far” away from the victim, the sources said.
At this point, detectives are trying to determine whether Thompson was targeted because of some type of personal conflict or as a result of his work as an insurance executive, sources said. The killer apparently had some knowledge of Thompson’s schedule on Wednesday and the fact that he would be arriving at the Hilton well before the company meeting was to begin, the sources said.
Police are interviewing Thompson’s colleagues and family about any potential specific threats, Kenny said.
What we know about the victim
Thompson, 50, was in New York City for the UnitedHealthcare investors conference, which was scheduled to start at 8 a.m. The conference was being held at the Hilton outside of which he was shot, but he was not staying there, police said.
UnitedHealthcare’s parent company, UnitedHealth Group, the largest health insurer in the world, said in a statement, “We are deeply saddened and shocked at the passing of our dear friend and colleague Brian Thompson.”
“Brian was a highly respected colleague and friend to all who worked with him,” the company said. “We are working closely with the New York Police Department and ask for your patience and understanding during this difficult time. Our hearts go out to Brian’s family and all who were close to him.”
This story has been updated.
ABC News’ Peter Charalambous, Madison Burinsky, Kate Holland, Chris Looft and Sabina Ghebremedhin contributed to this report.
