Amid widespread economic fluctuations, insureds who were fully covered six months ago may be underinsured today. (Credit: ink drop/Adobe Stock)

As Greater Los Angeles moves forward with cleanup and rebuilding efforts following the January wildfires, many property owners may soon face another wave of distress. In an interview with CNBC, Amy Bach, executive director of nonprofit consumer advocacy group United Policyholders, shared that as many as two-thirds of wildfire victims will discover that their properties are underinsured — a realization that can feel like a second form of loss. For insureds, this news can be devastating, and carriers often bear the brunt of their frustration.

This troubling scenario highlights the ongoing challenge of insurance-to-value (ITV). The issue is complex, driven by rising material costs, widespread labor shortages, and broader socioeconomic factors. While agents and brokers have little control over these external pressures, they are responsible for keeping their clients well-informed and adequately covered.


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