Mercury General Corporation has provided a preliminary assessment of the recent wildfires in Southern California, expecting losses to exceed its reinsurance retention level of $150 million.
Since January 7, 2025, extreme wind-driven wildfires have caused widespread destruction across Southern California. The fires are ongoing, and it will take time before Mercury can provide a full estimate of the total losses.
Mercury’s reinsurance program offers $1.29 billion of limits on a per occurrence basis after covered catastrophe losses surpass the company’s $150 million retention. It also includes coverage for assessments from the California FAIR Plan.
If losses are reinsured, the program requires reinstatement of limits to cover future events. If the full $1.29 billion limits are used up, then the total reinstatement premium would be $101 million.
Yesterday, we reported that Mercury will begin writing new homeowners insurance policies in Paradise, California, becoming the first major insurer to return to the area since the Camp Fire in November 2018.
As we wrote earlier, the LA wildfires are believed to have destroyed over 10,000 structures, with insured losses estimated between $10 billion and $20 billion.
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