There have been catastrophic fires in California before, but never anything quite like this.  So what is going to happen to homeowners if their insurance companies go bankrupt and cannot pay?  Even the ones that do not go bankrupt are really going to struggle.  I have a feeling that some of them will delay payouts for an extended period of time and will deny as many claims as they possibly can in a desperate attempt to survive.  In the end, it is likely that vast numbers of homeowners that were counting on their insurance companies to bail them out will be left holding the bag.

It is being projected that total economic losses from these fires could reach 150 billion dollars, and the insurance industry will be hit with approximately 20 to 25 billion dollars of those losses…

Analysts at Evercore ISI have estimated that insurance industry losses from the Los Angeles wildfires will be in the $20 billion to $25 billion range, and also expect the fires to be treated as one event which could help primary carriers reach their reinsurance coverage.

That is going to be a really tough pill to swallow.

One expert is warning that we are literally "on the edge of a major financial crisis for the insurance industry"…

"I think we're on the edge of a major financial crisis for the insurance industry," says Daniel Aldrich, a Northeastern professor, director of the university's Resilience Studies Program and co-director at the Global Resilience Institute.

I agree with him.

I don't see how the industry is going to avoid a historic crisis in the aftermath of these fires.

In particular, Politico is telling us that this "could be the final straw that breaks California's insurance market"…