150 BILLION to rebuild LA ~ where's the money going to come from

[LaurieFairyCake]

That's HUGE amounts right?

I can't even conceive how much money that is is it more than our gdp?

I assumed much of it would be via insurance firms.

UK's GDP is in the trillions.

Paris Hilton?

California's economy is huge, it's about the 5th largest economy in the world.

The UK spends about £180 billion a year on the NHS alone.
Yes it's a lot of money but in the grand scheme of things not so much

I'm sure Elon Musk could find that much down the back of his no doubt many sofas.

But in reality - insurance and federal funding will be significant I would imagine

Insurance- everything will go up even here in the UK... so in effect we all pay for it.

Golly, didn't know our gdp was trillions - thanks

Insurance

UK GDP was USD3.34 trillion in 2023 (a trillion being 1,000 billion) according to google.

Hurricane Milton (the October '24 hurricane that went through Florida had an estimated insurance loss of about $60bn.

I worry for the poorer house-owners who were unable to get their house insured after their 2024 insurers refused to renew (too risky).

Is it not enough to bankrupt the insurance companies though, I read somewhere that loads of people had their insurance cancelled a few months ago

It will largely be insured, however whether they will be able to get insurance again at any sort of affordable cost is another matter. I would think a lot of the area would be uninsurable for the average person

You.

Insurances companies are mostly multi-national now, finance certainly is, and the one thing you can be sure of is that no company profits will be allowed to suffer. So expect to see costs rise to cover claims.

Insurance costs for all of us will go up but most of all for Californians

it is an astronomical amount of money. That said it would likely cost less to fix the climate crisis than to deal with all the different catastrophes one at a time. Which will keep happening and keep getting worse!

And they should have sought out other insurers when that happened, assuming they aren't in such a high risk area the home is uninsurable like many in the UK that get flooded.

Insurance companies pay into re-insurance funds, essentially globalising insurance to cover for mass events in one location . It ll be fine.

LaurieFairyCake · Today 13:26

Is it not enough to bankrupt the insurance companies though, I read somewhere that loads of people had their insurance cancelled a few months ago

That’s what I thought.

clearinguptheclutter

That's an interesting point, I wonder how much it would cost to fix the climate crisis ?

All insurance companies "lay off" some of their exposures by buying insurance for themselves (reinsurance). In turn, the reinsurers lay off some of these risks/exposures themselves to avoid undue exposure to any particular risk.

There are specialist reinsurance companies and Lloyd's of London who provide coverage for this sort of thing. The capital markets also have CAT bonds (not sure how popular these are these days).

Yes there is a risk that a few companies will fail, but not as big as September 11 (World Trade Centre)

What happened after the fires in Hawaii?

Was it the state or the insurers who paid?

So the insurance companies will cover rebuilding of homes?

What happens a) if a homeowner didn't have the correct insurance to cover this? and b) where will all the people made homeless as a result of the fires be housed whilst building work is going on?

Insurance overlaid with Reinsurance so that all claims can be met.

A lot of them are people's second homes, and most of the people affected are multimillionaires so I wouldn't worry about it too much.

I follow an influencer who's been evacuated and she's sitting in a 5 star hotel with her kids and husband eating caviar fries. She's more concerned the nanny has had to go back to check on her own home so she won't have childcare for the next few days and will have to look after her own kids, more than anything else.

The reason the cost is so high is because much of the property is so expensive full of expensive items, the area was incredibly wealthy. There will be insurance claims not just for the roof over people's heads but the 30 gucci bags and 4 luxury vehicles that burned with the house. It's devastating to lose your home no matter your circumstances but the wealthier people can move to their holiday residence and use some capital to get on their feet again. The staff who worked in those houses will probably ultimately suffer more.

Tbh I don’t think that insurance companies we should be worried about.
It’s the individuals that will or will not be actually be reimbursed. Those who will receive next to nothing and those who their insurance will claim weren’t insured anyway.

A lot of people have lost everything there.

Assuming they don’t go bust in the process

They’d already been cancelling cover in areas that they considered too risky, so there are thousands (so the MSM say) who will be on their own with this, The state and the federal governments will probably have to step in (public opinion will demand if of them). Public donation will help too. Right now the appeals are focused on immediate need, but over time that will probably switch to a rebuilding fund

I am interested too how this will all work out. Where are all the construction workforce, machinery and materials going to come from? I imagine the works and supplies will be hugely expensive and lengthy because of shortages.