How will the California wildfires shape the home insurance industry?

The fires in Los Angeles are raising serious questions about the impact on California's growing insurance crisis. Reporter Stephanie Sierra investigates the financial impacts expected in the wake of this devastation. The governor has declared a state of emergency. As we watch the devastating wildfires move through Los Angeles County, it's raising new threats to the state's growing insurance crisis. With more than 13,000 homes at risk, losses could approach at least $10 billion. That's according to preliminary estimates from JPMorgan Chase. This, paired with concerns as the state is implementing a new reform plan that analysts say could raise insurance premiums by 40% on average. In fire-prone areas, that could be up to 100% or more. We have been operating under 20th century regulations for a 21st century problem. And we're starting to see already insurance companies come in. We need to make sure we allow them to use technology so that we can better track and understand how these fires are reacting. But critics argue the reality of that new technology Lara is talking about will only help insurers to raise rates with limited transparency, especially as these fires continue to impact the same areas. As far as seeing increased writing in those areas, I think that goal has probably been set back here. Limiting access and raising concern about cost affecting all of us. Well, clearly companies are going to ask for more for home insurance because they can. Because our insurance commissioner just loosened all the regulatory rules. So they can ask for pretty much anything they want now for home insurance and we can't stop them. The commissioner's plan is implementing what's called catastrophe modeling, which is basically software algorithms insurers will use to assess risk and make decisions on your coverage. So anything from having a fire in your neighborhood to poor mitigation or even the lack of staffing at your local fire department, all could impact your ability to have coverage. An issue we're seeing in Pacific Palisades. The crisis that we face. Four times the normal demand was seen for 15 hours straight. You know, the city of Oakland just announced that they were going to close five fire stations because of their budget crisis. Yes, that is definitely one of the many factors insurance companies consider.