Joseph Polidoro / January 22, 2025

The Trouble With Homeowners’ Insurance, Explained

Inflation, market distortions, and disasters have added up to higher prices and fewer options.

Explainers

Powerful Winds Fuel Multiple Fires Across Los Angeles Area

An aerial view shows burned homes near two that survived the Eaton Fire on January 19, 2025, in Altadena, California. Multiple wildfires which were fueled by intense Santa Ana Winds have burned across Los Angeles County leaving at least 27 dead with over 180,000 people having been under evacuation orders. Over 12,000 structures, many of them homes and businesses, burned in the Palisades and Eaton Fires. (Photo by Mario Tama/Getty Images)

In the wake of the most destructive wildfires in U.S. history—the Los Angeles wildfires—“the insurance industry as we know it is in big trouble,” as economics writer Noah Smith recently suggested. Is it trouble the industry can get out of? The details are unclear, but parts of the outline are beginning to form.