Insurers dropped fire coverage for thousands of homeowners in Palisades just months ago as experts fear devastation could cost $60bn

One of California’s biggest insurance companies cancelled fire coverage for thousands of homeowners in the Pacific Palisades last summer in an attempt to avoid ‘financial failure’.

State Farm Insurance said in 2023 that it would stop accepting new homeowners-insurance applications in the Golden State. 

It then said last year that it would stop covering 72,000 homes across California. 

The move from State Farm Insurers came due to the growing frequency and severity of wildfires in the state.

Historic wildfires have been tearing through the ritzy enclave of the Pacific Palisades since Tuesday, and have since spread to surrounding suburbs as a windstorm carried embers and debris in all directions. 

The death toll of the apocalyptic infernos has now reached five, as heroic firefighters still battle hellish conditions on the front lines of at least five different fires. 

With the fires causing devastating losses for the residents of Pacific Palisades, many will need to rely on their insurance companies to repair the damage caused by the blaze, as experts fear that damages could cost up to $60 billion. 

DailyMail.com has contacted State Farm for comment. 

A number of private insurers have been cutting coverage in areas that are a-risk of wildfires across California, which has meant homeowners have been left to fend for themselves. 

Several insurance companies in the state have noted that the rising risk of wildfires and state regulations have resulted in them having to cull coverage, sparking a crisis among the sector as a result. 

Meanwhile, homeowners have had to look for other options that will offer them protection in the event of a fire. 

California’s FAIR plan, an insurer of last resort, has more than doubled its policies between 2020 and 2024 because of this. 

The ongoing wildfire is on track to be the most destructive blaze ever, having ripped through the glitzy celebrity mansion and causing an estimated $48 billion in damage. 

The economic loss from the California infernos could reach $52 to $58 billion, according to AccuWeather, with experts saying that the damage from the deadly fires could become the most costly in US history.

LA Fire Chief Kristin Crowley believes the fire started accidentally in a back garden around 10am Tuesday morning. 

She told reporters the fire is ‘spreading at a speed beyond anything we’ve seen… it’s now unlike anything we have seen in our lifetime.’

The prospect of such an infernal firestorm was raised by podcaster and comedian Joe Rogan last summer, who recounted a chilling conversation he’d had with an LA firefighter.

Speaking to guest and fellow comedian Sam Morril in the July 2024 episode, Rogan recounted: ‘He said: ”One day, it’s just gonna be the right wind and fire’s gonna start in the right place and it’s gonna burn through LA all the way to the ocean and there’s not a f***ing thing we can do about it”.

‘If the wind hits the wrong way, it’s just going to burn through LA,’ he said.

The firefighter’s prediction, as told by Rogan, appears to have been proven true, with environmental conditions and unfavourable winds whipping the wildfire into an uncontrollable state.

Meanwhile, scientists at the University of California Los Angeles (UCLA) have put the fire down to a global pattern of what they’re calling ‘hydroclimate whiplash’ – rapid swings between intensely wet and dangerously dry weather.

Experts say that heavy rains from El Niño last year fuelled vegetation growth in the Los Angeles area, which had since dried out and become highly flammable.

Once the flames ignited, SoCal was battered by ‘devil winds’, formally known as Santa Ana winds – warm and gusty northeast winds that blow from the region’s interior toward the coast, unlike the usual winds which come in from the Pacific and blow cooler, more moist air inland.