That won't be easy in California. In order to raise premiums here, insurers would have to prove to the California Department of Insurance that they sustained losses over at least a three-year period.
"An event like these fires does not cause significant increase in rates," said Samuel Sorich, president of the Assn. of California Insurance Companies.
"The formula for rate filing and rate review looks at a trend in losses over an extended period of time."
Insurers are also encouraged to invest property casualty policies such as home and automobile insurance in more conservative areas such as municipal bonds.
Doing so maintains liquidity for the insurers, and state regulators have the option of revoking licenses of firms that invest recklessly, said Darrel Ng, spokesman for the state insurance agency.
In the last year, some insurers have reduced rates. Allstate Corp. dropped homeowner rates by 28.5% after it was found to be overcharging policyholders.
Mercury General Corp. dropped automobile insurance rates by 3% and homeowners insurance by 10% -- a move that was estimated to save Californians $41 million a year.
The rate cuts came after a series of highly profitable years for insurers when the rate of auto accidents decreased, Sorich said.
"Because of the good years, they've been building up capital strongly," said Robert Hunter, director of insurance for the Consumer Federation of America. "I don't think we'll see a remarkable number of insolvencies. Will rates go up? It's possible. But lately, rates have been going down."
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david.pierson@latimes.com
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(BEGIN TEXT OF INFOBOX)
Where to find help
Sources of state aid for wildfire victims:
DISASTER RELIEF
One-Stop Local Assistance Center, East Anaheim Gymnasium, 8165 E. Santa Ana Canyon Road: (714) 765-3100, beginning at 7 a.m.
Aid information is available here regardless of residence. Other local centers are expected soon in Santa Barbara and Los Angeles counties.
State Supplemental Grant Program, California Department of Social Services: (916) 651-8848.
INSURANCE PROBLEMS
State Department of Insurance: (800) 927-4357 or www.insurance.ca.gov.
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Source: Los Angeles Times
