Pacific Palisades Insurance Crisis: Wildfires Lead to Policy Cancellations 🔥

State Farm has dropped around 1,600 policies in Pacific Palisades, where the Palisades Fire has devastated the area. Homeowners in Pacific Palisades have increasingly relied on the FAIR Plan for fire insurance, with coverage significantly expanding in recent years. The fire could become the costliest wildfire in history due to the high value of homes in the area, with a median price of over $3 million. State Farm's decision reflects a trend among insurers, including Allstate and Farmers, to halt coverage in high-risk areas, citing climate risks. A new California regulation aims to stabilize the market, requiring insurers to expand coverage in wildfire-prone areas while allowing reinsurance costs to be passed to consumers.