Pacific Gas and Electric announced Friday that it has agreed to an $11 billion settlement to resolve insurance subrogation claims from a series of 2017 wildfires in Northern California and the 2018 Camp Fire.
The claims are based on payments made by insurance companies to individuals and businesses with insurance coverage for wildfire damages. The settlement covers entities representing about 85% of insurance subrogation claims related to the fires, PG&E said.
The settlement is subject to approval of a bankruptcy court since PG&E previously filed for Chapter 11 bankruptcy protection.
The agreement comes as California insurers drop policies in high-fire risk areas or raise rates so high that people are unable to sell their homes.
"It’s been getting worse, but about a year (ago), I noticed it being affected, and the values have gone down because the homes can’t sell," said Stephani Menser Polley, a realtor in El Dorado County.
Polley said she's had to take a new approach when representing home buyers, which is determining first whether a home is insurable.
"Instead of shopping and going to look at homes, we start with sending the addresses to our insurance brokers, and then they tell us if it’s reasonable insurance. And then we decide if we want to go see the homes," she said.
It's a reversal from traditional buying practices.
"Typically, you find the house, fall in love and then you do your inspections, but we start there because it’s a waste of everyone’s time if they can’t afford to do the insurance."
Things have become so difficult for sellers in the Sierra foothills that some sellers are offering to cover the cost of a year to two years of insurance for a buyer, said Polley.