Should Fossil Fuel Companies be Forced to Pay for Los Angeles Wildfire Losses?

As wildfires swept through Los Angeles County last month, the New York Times published a commentary by former insurance commissioner Dave Jones, who suggested that oil companies should pay for the disaster’s immense losses of human life and property, not insurance companies.

“Major oil and gas companies have known for decades that burning their products could lead to potentially catastrophic events like the higher temperatures and abnormally dry conditions that fed the fires still being battled in Los Angeles,” Jones, now director of the Climate Risk Initiative at UC Berkeley, wrote, adding, “We should require these highly profitable companies to compensate communities, homeowners, businesses and even insurers for the losses.”

Jones cited what happened after the Camp Fire destroyed the rural community of Paradise in 2018 as a model for going after the oil industry. After paying the claims of Paradise property owners, insurers recovered $11 billion from PG&E because the failure of a single metal hook on a transmission tower was deemed to have ignited the fire.

Dinging oil companies for the damages in Los Angeles would dissuade insurers from exiting the California market or cutting back on coverage, Jones said, which they were doing prior to the firestorm in LA.