CNN’s Chetry Slams Insurers: If the Fires Don't Take It, 'Insurance Companies Just Might'
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.