Your Utility Could Go Bankrupt
Homeowners in parts of the country menaced by violent weather events cannot be insured in some cases. This has spread from dangerous coastal areas like those in Florida and Louisiana to places in the Midwest with tornado and hail storms lately. Some utilities face the same problems if their wires are in areas where wildfires could start.
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According to Bloomberg, “Western utilities and beyond are finding it prohibitively expensive, if not impossible, to insure against potential fire-related claims. The trouble comes after power companies from Hawaii to Texas have collectively faced tens of billions of dollars in damages from wind-driven wildfires linked to their equipment.” Wildfires, both in number and intensity, have grown most years over the last two decades.
Self Insure?
The operator of one insurance company told Bloomberg that almost no utility is immune from the problem. Among the reasons are more than live wires. Some wood poles used for electric lines are four or five decades old.
Some of these utilities can self-insure. However, can they operate if they cannot, and a large fire cripples them to bankruptcy without a debtor in possession? Good question.
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