From Nasdaq:

At least three people have died due to severe floods and mudslides that swept across Southern California. Unprecedented levels of rainfall caused extensive damage in the Los Angeles area. Nearly 440,000 homes were left without electricity, and 38 million people are placed under flood alert. Governor Gavin Newsom declared a state of emergency.

The floods have brought ongoing concerns for residents, as insurers flee the state due to the high risk of wildfires, causing the price of home and auto insurance to rise. The region is prone to heavy rains, and soil is oversaturated from the storm that began Sunday, prompting speculation that insurers covering the area will face significant financial burdens.

The calamity did not cause a major disturbance to insurance stock prices. Furthermore, the influx of natural disasters has caused some significant insurance companies to pull out of the California market, leaving many residents with more expensive insurance options and damaged homes without coverage.

The rising risk of natural disasters in California is causing a surge in home insurance prices. Some residents in high-risk areas have been forced to opt for more expensive plans designed for customers who have been rejected by other insurers.

A similar trend has been reported in Florida, where insurance companies have also withdrawn from the state. As natural disasters continue to plague California and other regions, the cost of home insurance is predicted to rise even higher, impacting millions of residents.

Despite the ongoing disaster and insurance crisis, insurance ETFs were generally unaffected by news of the floods, with some even experiencing moderate increases in value in light of the ongoing situation.



Read more: Deadly Floods In California Put 38 Million Under Emergency Alert While State Faces Massive Insurance Crisis