In this week's news will talk about how State Farm confirms $2.45 billion claims payout after LA wildfires, New Trump tariffs could add billions to claims costs, and much more…
State Farm confirms $2.45 billion claims payout after LA wildfires
State Farm reported that it has paid out $2.45 billion across 12,200 claims related to the January wildfires in Los Angeles, as loss totals continue to rise.
The company, the largest homeowners and personal auto insurer in California, said it insures approximately 250,000 homes and 880,000 vehicles in Los Angeles County.
In a statement, State Farm said it had deployed its full catastrophe response teams to manage the volume of claims following the fires, which began on Jan. 7 and caused widespread property damage.
Initial estimates released by the company projected direct losses of $7.6 billion. State Farm reported that, after reinsurance, retained losses could be approximately $212 million, according to AM Best.
The company, the largest homeowners and personal auto insurer in California, said it insures approximately 250,000 homes and 880,000 vehicles in Los Angeles County.
In a statement, State Farm said it had deployed its full catastrophe response teams to manage the volume of claims following the fires, which began on Jan. 7 and caused widespread property damage.
Initial estimates released by the company projected direct losses of $7.6 billion. State Farm reported that, after reinsurance, retained losses could be approximately $212 million, according to AM Best.
Minnesota weighs state-run auto insurance plan for low-income drivers
Legislation under review in Minnesota would establish a state-run automobile insurance program aimed at providing low-cost coverage to eligible low-income drivers.
Known as the Minnesota Lifeline Insurance Program, the proposal would create a residual market mechanism funded by participant premiums and administered with the goal of reducing the number of uninsured drivers in the state.
Supporters of the bill argue the program could improve road safety and access to insurance by removing rate-setting factors such as ZIP code and marital status, which are commonly used in the traditional market.
Anna Odegaard, senior advocacy and campaign strategist for the Midwest region at the Fines and Fees Justice Center, said the program would maintain safe-driving eligibility requirements and remove the profit component from rate structures, helping to control premium increases.
Known as the Minnesota Lifeline Insurance Program, the proposal would create a residual market mechanism funded by participant premiums and administered with the goal of reducing the number of uninsured drivers in the state.
Supporters of the bill argue the program could improve road safety and access to insurance by removing rate-setting factors such as ZIP code and marital status, which are commonly used in the traditional market.
Anna Odegaard, senior advocacy and campaign strategist for the Midwest region at the Fines and Fees Justice Center, said the program would maintain safe-driving eligibility requirements and remove the profit component from rate structures, helping to control premium increases.
New Trump tariffs could add billions to claims costs
New US automobile tariffs, along with additional proposed tariffs targeting key trading partners, could increase costs and introduce further volatility across property, auto, life, and health insurance lines, according to industry analysts.
AM Best director Ann Modica said the imposition of tariffs may generate uncertainty that affects both underwriting and investment strategies.
Broader geopolitical tensions and potential supply chain disruptions are also likely outcomes. Modica noted that these developments could influence asset markets, capital flows, and investor behavior, contributing to greater market volatility throughout 2025.
The US is considering a 25% tariff on imports from Canada and Mexico, in addition to higher tariffs on Chinese goods. These measures are expected to negatively impact the insurance sector, with particular implications for homeowners’ and personal auto insurance.
AM Best director Ann Modica said the imposition of tariffs may generate uncertainty that affects both underwriting and investment strategies.
Broader geopolitical tensions and potential supply chain disruptions are also likely outcomes. Modica noted that these developments could influence asset markets, capital flows, and investor behavior, contributing to greater market volatility throughout 2025.
The US is considering a 25% tariff on imports from Canada and Mexico, in addition to higher tariffs on Chinese goods. These measures are expected to negatively impact the insurance sector, with particular implications for homeowners’ and personal auto insurance.
New York bill could drive insurance premiums up
A newly introduced bill in the New York State Assembly seeks to hold major corporations accountable for climate-related financial risks. The legislation, A07195, introduced by Assemblymember Otis, would require corporations operating in the state with annual gross revenues of at least $500 million to submit an annual climate-related financial risk report.
Referred to the Committee on Corporations, Authorities, and Commissions on March 21, 2025, the bill is designed to enhance corporate transparency regarding financial risks associated with climate change. If enacted, it would mandate covered corporations to submit reports to the secretary of state and make them publicly available.
Key provisions of the bill include:
Referred to the Committee on Corporations, Authorities, and Commissions on March 21, 2025, the bill is designed to enhance corporate transparency regarding financial risks associated with climate change. If enacted, it would mandate covered corporations to submit reports to the secretary of state and make them publicly available.
Key provisions of the bill include:
- Corporations with annual gross revenues of $500 million or more must assess and disclose climate-related financial risks.
- Reports must follow guidelines from the Task Force on Climate-Related Financial Disclosures (TCFD) or a successor framework.
- Companies must outline measures they are taking to mitigate financial risks posed by climate change.
- Reports must be submitted annually and made available to the public on company websites and through the secretary of state’s office.
Montana bill to redirect insurance tax to property
Property tax is always an emotive topic with voters – which is why Montana’s legislators are looking to divert funds from the insurance sector – into a vote winner.
In the move which is poised to reshape fiscal flows in Montana's insurance landscape, state lawmakers have introduced a bill that would redirect a significant portion of insurance tax revenue toward property tax relief efforts, raising questions about its broader impact on the insurance sector.
The bill, known formally as LC 4443, mandates that at the end of each fiscal year, $10 million collected under existing insurance premium tax provisions (specifically, Section 33-2-705 of Montana law) be transferred to a newly designated State Property Tax Assistance Account. This shift marks a notable redirection of funds that have historically supported insurance regulatory functions and other state general fund priorities.
In the move which is poised to reshape fiscal flows in Montana's insurance landscape, state lawmakers have introduced a bill that would redirect a significant portion of insurance tax revenue toward property tax relief efforts, raising questions about its broader impact on the insurance sector.
The bill, known formally as LC 4443, mandates that at the end of each fiscal year, $10 million collected under existing insurance premium tax provisions (specifically, Section 33-2-705 of Montana law) be transferred to a newly designated State Property Tax Assistance Account. This shift marks a notable redirection of funds that have historically supported insurance regulatory functions and other state general fund priorities.
