It’s “Attack the Insurance Companies, The Sequel,” for CNN.
Similar to criticism of insurance companies after Hurricane Katrina, the October 26 “American Morning” launched a similar assault against the business after the California wildfires – except this time, they’re starting early.
“[T]he California wildfires are leveling entire communities, leaving homeowners with nothing,” CNN “American Morning” host Kiran Chetry said. “But, what the fires don’t take, the insurance companies just might. A bad and costly situation for homeowners may have just gotten much worse.”
An estimate from TheStreet.com reported insurance companies stand to lose $1.6 billion from the wildfires – and the number could go much, much higher.
Insurers are now requiring homeowners in certain high-risk areas to take precautions.
“[I]nsurers are also ordering homeowners to clear brush, cut down trees, even install fireproof roofs,” CNN correspondent Chris Lawrence said. “The improvements can cost up to $20,000 with no guarantee their policies won’t be canceled.”
But they’re doing so for the wrong reason according to Lawrence – the profit motive.
“Managing that risk can be profitable,” Lawrence said. “State Farm and Allstate (NYSE:ALL) each made $5 billion in profit last year.”
The CNN segment also quoted a pro-regulation “consumer rights advocate.”
Remarks from Candysse Miller of the Insurance Information Network were buried three minutes into the “American Morning” segment.
Miller said, “it begs the question, are we [California homebuilders] building in safe areas,” when there are wildfires in the same places every 20 years.