How Los Angeles wildfires could raise insurance rates in Nebraska

LINCOLN, Neb. (KLKN) – As the fires in Los Angeles raze thousands of homes to the ground, homeowners across the nation could feel the ripple effects.

A Nebraska insurance agent said rates could go up for homeowners from thousands of miles away.

“We see the significant damage in California, and the estimated figures are just astronomical,” said Dave Chally, the president of Barney Insurance.

SEE ALSO: Strong winds forecast to return and threaten Los Angeles area’s fight against fires

He said the good news for Nebraskans is that insurance rates are usually decided by the region you live in.

So while Californians will see a massive increase, most people here will avoid that.

But there is one way these fires could raise your rates.

“Many of the insurance companies buy reinsurance,” Chally said. “So, for example, their company is responsible in a particular disaster for covering a certain amount. And then beyond that, those companies buy their own insurance, which we call reinsurance.”

SEE ALSO: Nebraska senator donating half of her small business profits to Los Angeles wildfire victims

Chally said many of the reinsurance companies cover agencies across the nation.

So he said if the reinsurance companies have significant losses from the LA fires, they will likely raise their rates, which would trickle down to homeowners.

Chally estimates that if it were to raise rates in Nebraska, you would notice it within the year.

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But homeowners in the state are already feeling the financial stress of insurance, which has been steadily increasing.

In fact, Nebraska has some of the highest home insurance rates because of severe weather.

“There’s just a lot of significant weather events that have taken a large toll on insurance and homeowners,” Chally said.

The tornadoes and strong winds in Nebraska coupled with the hurricanes and wildfires on the coasts are driving premiums higher and higher.

SEE ALSO: ‘So heartbreaking’: Lincoln woman from California feels for friends during wildfires

Users of the Now Local News App weighed in.

“We’re going to see destructive weather happening everywhere because climate change is at our doorstep,” Neveen said. “So of course the insurance companies will continue to raise their prices.”

Lorraine agreed, saying she’s concerned.

“We already have a huge crunch put on us with inflation, so this kind of thing will cause homeowners insurance to skyrocket to the point where I’m not sure everyone will be able to afford it,” she said.

Chally said those who live in California will probably struggle to find insurance at all because many companies are pulling out of the state due to the high fire risk.

SEE ALSO: Lincoln company working on drones to help put out large wildfires like LA’s