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How the devastating Los Angeles fires could deepen California's home insurance crisis

Published

12 months ago

January 10, 2025

How the devastating Los Angeles fires could deepen California's home insurance crisis

When raging wildfires tore through Pacific Palisades and other local communities this week, they not only left a path of destruction reminiscent of a World War II bombing campaign, but threatened to deepen a crisis that has already left hundreds of thousands of Californians struggling to find and keep affordable homeowners insurance.

The multiple fires from Los Angeles to the San Gabriel Valley that have burned thousands of structures since Tuesday — leading to losses that by one early estimate are well into the tens of billions of dollars — hit Southern California as insurers have been dropping customers statewide citing the increasing number and severity of wildfire-related losses.

The Palisades fire alone, which consumed more than 5,000 homes and structures, is being called the most destructive fire ever to hit the city, while the fires across the county are likely to be one of the most expensive natural disasters in U.S. history.

“It’s just an unmitigated disaster,” said Amy Bach, executive director of United Policyholders, a consumer advocacy group. “Wildfires in January? This just proves insurers’ point that the risk is so significantly increased due to climate change.”

State Farm, the state’s largest home insurer, announced in March it would not renew 72,000 property insurance policies, while Chubb and its subsidiaries stopped writing new high-value homes with higher wildfire risk — just to name two insurers that pulled back from the California market.

It’s not clear how many homeowners in Pacific Palisades and elsewhere might not have had coverage, but at least some homeowners reported that insurers had not renewed their policies before the disaster struck. Actor James Woods, who lost his home in the Palisades fire, tweeted Tuesday that “one of the major insurances companies canceled all the policies in our neighborhood about four months ago.”

State Farm last year told the Department of Insurance it would not renew 1,626 policies in Pacific Palisades when they expired, starting last July.

A spokesperson for State Farm declined to comment on the decision but said: “Our number one priority right now is the safety of our customers, agents and employees impacted by the fires and assisting our customers in the midst of this tragedy.”

The situation has left many homeowners in neighborhoods at high wildfire risk with little choice but to seek relief from the California FAIR Plan, an insurer of last resort that sells policies with lesser coverage. The policies cover losses up to $3 million to a dwelling and its contents caused by certain hazards, such as fire, but do not include personal liability and other protection that are typically offered by private insurers.

The FAIR Plan has seen its policies grow from a little over 200,000 in September 2020 to more than 450,000 as of last September. That has roughly tripled its loss exposure to $458 billion over the same period. Pacific Palisades has one of the state’s highest concentrations of FAIR Plan policy holders, with the insurer estimating its exposure in the neighborhood at $5.89 billion.

JP Morgan analysts estimate that total L.A. County losses could be close to $50 billion, while the losses insurers will have to pay could top $20 billion. Another estimate puts the losses even higher.

Such losses could cause insurers to exit the market completely, which Tokio Marine America Insurance Co. and Trans Pacific Insurance Co. said in April they would do in not renewing 12,556 homeowners.

The losses also could prompt insurers to further raise premiums, even though some insurers already have been granted big rate hikes, such as a 34% increase Allstate received last year.

Denise Rappmund, senior analyst at Moody’s Ratings, said, “These events will continue to have widespread, negative impacts for the state’s broader insurance market — increased recovery costs will likely drive up premiums and may reduce property insurance availability.”

Should insurers further withdraw from the market, that would put additional pressure on the FAIR Plan, which is is backed by the state’s licensed insurers, such as State Farm, who have to pay claims if they exceed the FAIR Plans reserves, reinsurance and catastrophe bonding. The insurers also can assess their own policyholders surcharges in the billions of dollars to bail out the plan under regulations put in place last year by Insurance Commissioner Ricardo Lara as part of his Sustainable Insurance Strategy to help the crippled market.

It’s unclear whether the plan will be able to absorb the losses like it did after the 2018 Camp fire that destroyed the town of Paradise in North California. That conflagration was the single costliest natural disaster in the world that year with $12.5 billion in covered losses and $16.5 billion in total losses, according to the reinsurance firm, Munich RE.

“This further complicates an already complicated and hardened market,” Lara said of the fires, in an interview with The Times.

Nonetheless, Lara’s reforms seek to ensure the FAIR Plan remains solvent and to make it more attractive for insurers to write policies in fire risky neighborhoods now being absorbed by the program. He said the regulations should encourage insurers to write more homeowners policies, and if not, they can be adjusted. “I feel very confident,” he said.

For the first time, California insurers can use so-called “catastrophe models” in setting their rates. Instead of largely relying on past claims data, the computer programs attempt to better refine an insurer’s risk by taking into account a multitude of variables that affect a property’s likelihood to suffer a loss.

The other major policy change allows insurers to charge California homeowners for the cost of reinsurance they buy from other insurers to limit their losses during huge catastrophes, such as wildfires and floods. This cost shift to policyholders is common elsewhere but a big change for California, where it will raise premiums.

In return for those concessions, insurers will have to write insurance in high-risk wildfire neighborhoods equivalent to 85% of their market share, meaning an insurer with a 10% statewide market share would have to cover 8.5% of the homes in such neighborhoods — a target they have at least two years to reach. Lara’s plan has been blasted by the Los Angeles group, Consumer Watchdog, which says the regulations lack teeth in actually requiring insurers to meet the coverage goals.

“The Sustainable Insurance Strategy is not a magic wand. It’s a set of incentives,” Bach said. “At the end of the day, insurers are always still going to analyze, ‘Are we going to make money here or not?’”

How much this week’s fires will disrupt the already troubled insurance market depends, of course, on how big a disaster they are — but all indications are that insurers will have to absorb billions of dollars of claims given the number of homes destroyed, especially in the wealthy enclave of Pacific Palisades, where the average home is valued at about $3.5 million by Zillow.

Insurance industry experts say a clearer picture on the estimated losses will only come after adjusters have time to review submitted claims.

“I think it’s going to be 45 days before we know what the true damage is,” said Max Gilman, president of California personal lines at the brokerage HUB International.

Whatever the final cost, Gilman noted that the fires came after a couple of relatively light fire seasons — though in November the Mountain fire in Ventura County scorched more than some 20,640 acres and destroyed more than 130 homes amid parched conditions. That made it at the time the third most destructive fire in Southern California in a decade.

“I think what’s currently transpiring is going to be of grave concern for the future,” he said. “I feel like we we took three steps forward to take five steps back.”

Denne Ritter, a vice president with the American Property Casualty Insurance Assn. trade group, said it is too early to assess the impact of the fires on Lara’s reforms, especially given how they are just being put in place. Only one catastrophe model has been submitted for review to regulators, while the reinsurance regulation released last month still awaits final approval by the Office of Administrative Law.

“What the insurance industry wants is a healthy market in California where we can compete for business, as we have historically. And the number one priority right now is helping our customers get the resources they need to rebuild their lives and restore their property,” she said.

However, she noted that Mercury Insurance — which recently announced it started writing insurance again in Paradise — and Farmers Insurance, which said last month it is increasing the number of new home policies it will write, have “certainly made moves indicating a more bullish approach on the market.”

Allstate also has said it will resume writing new policies once Lara’s reforms are in place and it can get rates that fully cover its costs.

But all those pronouncements came before this week’s catastrophic fires.

Business

Student Loan Borrowers in Default Could See Wages Garnished in Early 2026

Published

7 hours ago

December 23, 2025

Press Room

Student Loan Borrowers in Default Could See Wages Garnished in Early 2026

The Trump administration will begin to garnish the pay of student loan borrowers in January, the Department of Education said Tuesday, stepping up a repayment enforcement effort that began this year.

Beginning the week of Jan. 7, roughly 1,000 borrowers who are in default will receive notices informing them of their status, according to an email from the department. The number of notices will increase on a monthly basis.

The collection activities are “conducted only after student and parent borrowers have been provided sufficient notice and opportunity to repay their loans,” according to the email, which was unsigned.

The announcement comes as many Americans are already struggling financially, and the cost of living is top of mind. The wage garnishing could compound the effects on lower-income families contending with a stressed economy, employment concerns and health care premiums that are set to rise for millions of people.

The email did not contain any details about the nature of the garnishment, such as how much would be deducted from wages, but according to the government’s student aid website, up to 15 percent of a borrower’s take-home pay can be withheld. The government typically directs employers to withhold a certain amount, similar to a payroll tax.

A borrower should be sent a notice of the government’s intent 30 days before the seizure begins, according to the website, StudentAid.gov.

The administration ended a five-year reprieve on student loan repayments in May, paving the way for forced collections — meaning tax refunds and other federal payments, like Social Security, could be withheld and applied toward debt payments.

That move ushered in the end of pandemic-era relief that began in March 2020, when payments were paused. More than 9 percent of total student debt reported between July and September was more than 90 days delinquent or in default, according to the Federal Reserve Bank of New York. In April, only one-third of the 38 million Americans who owed money for college or graduate school and should have been making payments actually were, according to government data.

“It’s going to be more painful as you move down the income distribution,” said Michael Roberts, a professor of finance at the Wharton School at the University of Pennsylvania. But, he added, borrowers have to contend with the fact that they did take out money, even as government policies allowed many to put the loans at the back of their minds.

After several extensions by the Biden administration, payments resumed in October 2023, but borrowers were not penalized for defaulting until last year. About five million borrowers are in default, and millions more are expected to be close to missing payments.

The government had signaled this year that it would send notices that could lead to the garnishing of a portion of a borrower’s paycheck. Being in collections and in default can damage credit scores.

The government garnished wages before the pandemic pause, said Betsy Mayotte, president of the Institute of Student Loan Advisors, which provides free advice for borrowers. But the 2020 collections pause was the first she was aware of, she said, and that may make the deductions more shocking for people who have not had to pay for years.

“There’s a lot of defaulted borrowers that think that there was a mistake made somewhere along the line, or the Department of Education forgot about them,” Ms. Mayotte said. “I think this is going to catch a lot of them off guard.”

The first day after a missed payment, a loan becomes delinquent. After a certain amount of time in delinquency, usually 270 days, the loan is considered in default — the kind of loan determines the time period. If someone defaults on a federal student loan, the entire balance becomes due immediately. Then the loan holder can begin collections, including on wages.

But there are options to reorganize the defaulted loans, including consolidation or rehabilitation, which requires making a certain number of consecutive payments determined by the holder.

Often, people who default on debt owe the smallest amounts, said Constantine Yannelis, an economics professor at the University of Cambridge who researches U.S. student loans.

“They’re often dropouts or they went to two-year, for-profit colleges, and people who spent many, many years in schools, like doctors or lawyers, have very low default rates,” he said.

This year, millions of borrowers saw their credit scores drop after the pause on penalties was lifted. If someone does not earn an income, the government can take the person to court. But, practically speaking, a borrower’s credit score will plummet.

Dr. Yannelis added that a common reason people default was that they were not aware of the repayment options. There are plans that allow borrowers to pay 10 percent of their income rather than having 15 percent garnished, for example.

The whiplash policy changes around the time of the pandemic were “a terrible thing from a borrower-welfare perspective,” Dr. Yannelis said. “Policy uncertainty is really terrible for borrowers.”

Business

Kevin Costner’s western ‘Horizon’ faces more claims of unpaid fees

Published

9 hours ago

December 23, 2025

Press Room

Kevin Costner’s western ‘Horizon’ faces more claims of unpaid fees

In the midst of attempting to complete filming on his western anthology ”Horizon: An American Saga,” Kevin Costner is facing another legal dispute over the production.

On Monday, Western Costume Co. sued Costner and the production companies behind the epic western, claiming unpaid costume fees and damages to some of the clothing during the filming of the series’ second episode.

“The costumes are costly to replace if damaged or not returned,” states the complaint, which included copies of invoices for about $134,000 in costume rentals. “Without a reasonable basis for doing so and/or with reckless regard to the consequences, defendants failed to pay for the rented costumes and failed to return the costumes undamaged.”

Western Costume, the iconic business based in North Hollywood, is seeking to recover roughly $440,000, including legal fees, according to the lawsuit filed Monday in Los Angeles Superior Court.

A spokesperson for Costner did not immediately respond to a request for comment.

The lawsuit is the latest in a series of legal and financial problems that have dogged the sprawling western drama, which Costner directed, co-wrote, starred in and partially funded.

In May, United Costume Corp., sued the production, claiming $350,000 in unpaid fees for the first two chapters of “Horizon.” Two months later, the costume firm filed to dismiss the suit with prejudice.

In May, Devyn LaBella, a stunt performer on “Chapter 2,” sued the production for sexual discrimination, harassment and retaliation in Los Angeles Superior Court. LaBella alleged an unscripted rape scene was filmed without the presence of a contractually mandated intimacy coordinator.

In a motion filed in August to get the suit tossed, Costner said he had reviewed LaBella’s complaint and was “shocked at the false and misleading allegations she was making.”

In October, a Los Angeles Superior Court judge denied Costner’s anti-SLAPP motion to dismiss the case. The judge also denied LaBella’s claim that Costner had interfered with her civil rights through the use of intimidation or coercion with respect to her participation in the filming of a rape scene, but allowed several of her other claims to proceed.

The case is pending.

The production is also facing an arbitration claim for alleged breaches in its co-financing agreement with its distributor New Line Cinema and City National Bank, “Horizon” bondholder, according to the Hollywood Reporter.

In June 2024, “Chapter 1” of the planned four-part series was released in theaters followed by a streaming broadcast on HBO Max, but it was largely panned by critics.

In its review, The Times described “Horizon” as “a massive boondoggle, a misguided and excruciatingly tedious cinematic experience.”

It failed at the box office, grossing just $38.8 million worldwide, on a reported $100 million budget.

“Chapter 2” premiered at the Venice International Film Festival last September, but its theatrical release was pulled and remains indefinitely delayed, while the final two chapters remain in production or development, according to IMDb.

Business

Snoopy is everywhere right now — from jewelry to pimple patches. Why?

Published

21 hours ago

December 23, 2025

Press Room

Snoopy is everywhere right now — from jewelry to pimple patches. Why?

As a child, Clara Spars, who grew up in Charles M. Schulz’s adoptive hometown of Santa Rosa, assumed that every city had life-size “Peanuts” statues dotting its streets.

After all, Spars saw the sculptures everywhere she went — in the Santa Rosa Plaza, at Montgomery Village, outside downtown’s Empire Cleaners. When she and her family inevitably left town and didn’t stumble upon Charlie Brown and his motley crew, she was perplexed.

Whatever void she felt then is long gone, since the beagle has become a pop culture darling, adorning all manner of merchandise — from pimple patches to luxury handbags. Spars herself is the proud owner of a Baggu x Peanuts earbuds case and is regularly gifted Snoopy apparel and accessories.

“It’s so funny to see him everywhere because I’m like, ‘Oh, finally!’” Spars said.

The spike in Snoopy products has been especially pronounced this year with the 75th anniversary of “Peanuts,” a.k.a. Snoopy’s 75th birthday. But the grip Snoopy currently has on pop culture and the retail industry runs deeper than anniversary buzz. According to Sony, which last week acquired majority ownership of the “Peanuts” franchise, the IP is worth half a billion dollars.

To be clear, Snoopy has always been popular. Despite his owner being the “Peanuts” strip’s main character and the namesake for most of the franchise’s adaptations, Snoopy was inarguably its breakout star. He was the winner of a 2001 New York Times poll about readers’ favorite “Peanuts” characters, with 35% of the vote.

This year, the Charles M. Schulz Museum celebrated the 75th anniversary of the “Peanuts” comic strip’s debut.

(Brennan Spark / Charles M. Schulz Museum)

But the veritable Snoopymania possessing today’s consumers really exploded with the social media boom of the early 2010s, said Melissa Menta, senior vice president of global brand and communications for Peanuts Worldwide.

That’s also when the company saw the first signs of uncharacteristically high brand engagement, Menta said. She largely attributed the success of “Peanuts” on social media to the comic strip’s suitability to visual platforms like Instagram.

“No one reads the comic strips in newspapers anymore,” Menta said, “but if you think about it, a four-panel comic strip, it’s actually an Instagram carousel.”

Then, in 2023, Peanuts Worldwide launched the campaign that made Snoopy truly viral.

That year, the brand partnered with the American Red Cross to create a graphic tee as a gift for blood donors. The shirt, which featured Snoopy’s alter ego Joe Cool and the message “Be Cool. Give Blood,” unexpectedly became internet-famous. In the first week of the collaboration, the Red Cross saw a 40% increase in donation appointments, with 75% of donors under the age of 34.

“People went crazy over it,” Menta said, and journalists started asking her, “Why?”

Her answer? “Snoopy is cute and cool. He’s everything you want to be.”

Art of the Peanuts characters hangs at the Charles M. Schulz Museum and Research Center.

The Red Cross collaboration was so popular that Peanuts Worldwide brought it back this year, releasing four new shirt designs. Again, the Snoopy fandom — plus some Woodstock enthusiasts — responded, with 250,000 blood donation appointments made nationwide in the month after the collection’s launch.

In addition to the Red Cross partnership, Peanuts Worldwide this year has rolled out collaborations with all kinds of retailers, from luxury brands like Coach and Kith to mass-market powerhouses like Krispy Kreme and Starbucks. Menta said licensed product volume is greater than ever, estimating that the brand currently has more than 1,200 licensees in “almost every territory around the world,” which is approximately four times the number it had 40 years ago.

Then again, at that time, Schulz enjoyed and regularly executed veto power when it came to product proposals, and licensing rules were laid out in what former Times staff writer Carla Lazzareschi called the “Bible.”

“The five-pound, 12-inch-by-18-inch binder given every new licensee establishes accepted poses for each character and painstakingly details their personalities,” Lazzareschi wrote in a 1987 Times story. “Snoopy, for example, is said to be an ‘extrovert beagle with a Walter Mitty complex.’ The guidelines cover even such matters as Snoopy’s grip on a tennis racquet.”

Although licensing has expanded greatly since then, Menta said she and her retail development associates “try hard not to just slap a character onto a T-shirt.” Their goal is to honor Schulz’s storytelling, she added, and with 18,000 “Peanuts” strips in the archive, licensees have plenty of material to pull from.

Rick Vargas, the senior vice president of merchandising and marketing at specialty retailer BoxLunch, said his team regularly returns to the Schulz archives to mine material that could resonate with customers.

“As long as you have a fresh look at what that IP has to offer, there’s always something to find. There’s always a new product to build,” Vargas said.

Indeed, this has been one of BoxLunch’s strongest years in terms of sales of “Peanuts” products, and Snoopy merchandise specifically, the executive said.

Bejeweled keychains of Snoopy and Charlie Brown.

Daniella Yacobovsky, co-founder of the celebrity-favorite accessory retailer BaubleBar, reported similar high sales for the brand’s recent “Peanuts” collection.

“Especially for people who are consistent BaubleBar fans, every time we introduce new character IP, there is this huge excitement from that fandom that we are bringing their favorite characters to life,” Yacobovsky said.

The bestselling item in the collection, the Peanuts Friends Forever Charm Bracelet, sold out in one day. Plus, customers have reached out with new ideas for products linked to specific “Peanuts” storylines.

More recently, Peanuts Worldwide has focused on marketing to younger costumers in response to unprecedented brand engagement from Gen Z. In November, it launched a collaboration with Starface, whose cult-favorite pimple patches are a staple for teens and young adults. The Snoopy stickers have already sold out on Ulta.com, Starface founder Julie Schott said in an emailed statement, adding that the brand is fielding requests for restocks.

“We know it’s a certified hit when resale on Depop and EBay starts to spike,” Schott said.

The same thing happened in 2023, when a CVS plush of Snoopy in a puffer jacket (possibly the dog’s most internet-famous iteration to date) sold out in-store and started cropping up on EBay — for more than triple the original price.

The culprits were Gen-Zers fawning over how cute cozy Snoopy was, often on social media.

Yellow and white pouches with Snoopy pimple patches.

Hannah Guy Casey, senior director of brand and marketing at Peanuts Worldwide, said in 2024, the official Snoopy TikTok account gained 1.1 million followers, and attracted 85.4 million video views and 17.6 million engagements. This year, the account has gained another 1.2 million followers, and racked up 106.5 million video views and 23.2 million engagements.

Guy Casey noted that TikTok is where the brand experiences much of its engagement among Gen Z fans.

Indeed, the platform is a hot spot for fan-created Snoopy content, from memes featuring the puffer jacket to compilations of his most relatable moments. Several Snoopy fan accounts, including one dedicated to a music-loving Snoopy plushie, boast well over half a million followers.

Caryn Iwakiri, a speech and language pathologist at Sunnyvale’s Lakewood Tech EQ Elementary School whose classroom is Snoopy-themed, recently took an impromptu trip to the Charles M. Schulz Museum in Santa Rosa after seeing its welcome center decked out with Snoopy decor on TikTok. Once she arrived, she realized the museum was celebrating the “Peanuts” 75th anniversary.

Two red construction-paper doghouses with Snoopy on each roof.

It’s a familiar story for Schulz Museum director Gina Huntsinger.

“Last December, we were packed, and I was at the front talking to people, and I just randomly asked this group, ‘Why are you here?’”

It turned out that the friends had traveled from Washington, D.C., and Las Vegas to meet in Santa Rosa and visit the museum after seeing it on TikTok.

According to Stephanie King, marketing director at the Schulz Museum, the establishment is experiencing its highest-ever admissions since opening in 2002. In the 2024–2025 season, the museum increased its attendance by nearly 45% from the previous year.

Huntsinger said she’s enjoyed watching young visitors experience the museum in new ways.

In the museum’s education room, where visitors typically trace characters from the original Schulz comics or fill out “Peanuts” coloring pages, Gen Z museumgoers are sketching pop culture renditions of Snoopy — Snoopy as rock band Pierce the Veil, Snoopy as pop star Charli XCX.

“When our social media team puts them up [online], there’s these comments among this generation that gets this, and they’re having conversations about it,” Huntsinger said. “It’s dynamic, it’s fun, it’s creative. It makes me feel like there’s hope in the world.”

A white wall with "Passport to Peanuts" art.

Laurel Roxas felt similarly when they first discovered “Peanuts” as a kid while playing the “Snoopy vs. the Red Baron” video game on their PlayStation Portable. For Roxas, who is Filipino, it was Snoopy and not the “Peanuts” children who resonated most.

“Nobody was Asian. I was like, ‘Oh, I’m not even in the story,’” they said.

Because Snoopy was so simply drawn, Roxas added, he was easy to project onto. They felt similarly about Hello Kitty; with little identifying features or dialogue of their own, the characters were blank canvases for their own personification.

Roxas visited Snoopy Museum Tokyo with their brother last year. They purchased so much Snoopy merchandise — “everything I could get my hands on” — that they had to buy additional luggage to bring it home.

For some Snoopy enthusiasts, the high volume of Snoopy products borders on oversaturation, threatening to cheapen the spirit of the character.

Growing up, Bella Shingledecker loved the holiday season because it meant that the “Peanuts” animated specials would be back on the air. It was that sense of impermanence, she believes, that made the films special.

Now, when she sees stacks of Snoopy cookie jars or other trend-driven products at big-box stores like T.J. Maxx, it strikes her as a bit sad.

“It just feels very unwanted,” she said. For those who buy such objects, she said she can’t help but wonder, “Will this pass your aesthetic test next year?”

Lina Jeong, for one, isn’t worried that Snoopy’s star will fade.

Jeong’s affinity for the whimsical beagle was passed down to her from her parents, who furnished their home with commemorative “Peanuts” coffee table books. But she fell in love with Snoopy the first time she saw “Be My Valentine, Charlie Brown,” which she rewatches every Valentine’s Day.

This past year, she was fresh out of a relationship when the holiday rolled around and she found herself tearing up during scenes of Snoopy making Valentine’s crafts for his friends.

“Maybe I was hyper-emotional from everything that had happened, but I remember being so struck,” that the special celebrated platonic love over romantic love, Jeong said.

It was a great comfort to her at the time, she said, and she knows many others have felt that same solace from “Peanuts” media — especially from its dear dog.

“Snoopy is such a cultural pillar that I feel like fads can’t just wash it off,” she said.

Soon, she added, she plans to move those “Peanuts” coffee table books into her own apartment in L.A.