{"id":2465714,"date":"2025-07-23T13:31:01","date_gmt":"2025-07-23T17:31:01","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/eaton-fire-could-bankrupt-californias-21-billion-wildfire-fund\/"},"modified":"2025-07-23T13:36:10","modified_gmt":"2025-07-23T17:36:10","slug":"eaton-fire-could-bankrupt-californias-21-billion-wildfire-fund","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/eaton-fire-could-bankrupt-californias-21-billion-wildfire-fund\/","title":{"rendered":"Eaton fire could bankrupt California\u2019s $21 billion wildfire fund"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">18<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Featon-fire-could-bankrupt-californias-21-billion-wildfire-fund%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2465714&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>The Eaton Fire, which occurred on January 7, 2025, in California, has raised serious concerns about the solvency of the state&#8217;s $21 billion wildfire fund established to protect utilities from wildfire-related costs. the fire, linked to equipment from Southern California edison, killed 19 people and destroyed over 9,000 homes. If Edison is found responsible, the resulting claims could perhaps exhaust the fund, which reimburses utilities for wildfire damages caused by their equipment. There is worry that Edison may lack incentive to minimize claims as it can recover costs from the fund, leading to inflated damage settlements.insured losses from the fire alone are estimated to exceed $15 billion, with some studies suggesting total costs could be as high as $45 billion, including uninsured and wrongful-death claims. The <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/chiefs-vs-49ers-the-economics-of-the-2024-super-bowl\/\" title=\"2024 Super Bowl: Chiefs vs 49ers - Economic Insights\">economic impact extends<\/a> to regional GDP losses and wage reductions. Additionally, hedge funds are <a href=\"https:\/\/amzn.to\/3YuVZYV\" >actively purchasing wildfire-related insurance claims<\/a>, aiming to profit from subrogation rights if Edison is held liable, a practice that has sparked ethical debates. the Eaton Fire threatens to deplete the wildfire fund, challenge California&#8217;s wildfire mitigation and insurance strategies, and place financial strain on the state&#8217;s recovery resources.  <\/p>\n<p class=\"readmore\">\n    <button onclick=\"showReadMore()\" id=\"readmorebtn\">Read more&#8230;<\/button>\n<\/p>\n<hr id=\"line\">\n<span id=\"more\"><\/p>\n<p><?xml encoding=\"utf-8\" ?><?xml encoding=\"utf-8\" ?><?xml encoding=\"utf-8\" ?><?xml encoding=\"utf-8\" ?><?xml encoding=\"utf-8\" ?><?xml encoding=\"utf-8\" ?><\/p>\n<div class=\"tdb-block-inner td-fix-index\"><span class=\"tdb-mobile-menu-button\"><i class=\"tdb-mobile-menu-icon td-icon-mobile\"><\/i><\/span><\/div>\n<div class=\"tdb-block-inner td-fix-index\"><span class=\"tdb-header-search-button-mob dropdown-toggle\" data-toggle=\"dropdown\"><i class=\"tdb-mobile-search-icon td-icon-search\"><\/i><\/span><\/div>\n<div class=\"tdb-block-inner td-fix-index\"><\/div>\n<div class=\"tdb-block-inner td-fix-index\"><span class=\"tdb-mobile-menu-button\"><i class=\"tdb-mobile-menu-icon td-icon-mobile\"><\/i><\/span><\/div>\n<div class=\"tdb-block-inner td-fix-index\">\n<div class=\"tdb-drop-down-search\" aria-labelledby=\"td-header-search-button\">\n<div class=\"tdb-drop-down-search-inner\">\n<form method=\"get\" class=\"tdb-search-form\" action=\"https:\/\/www.washingtonexaminer.com\/\"><\/form>\n<div class=\"tdb-aj-search\"><\/div>\n<\/div>\n<\/div>\n<p><a href=\"http:\/\/www.washingtonexaminer.com\/#\" role=\"button\" aria-label=\"Search\" class=\"tdb-head-search-btn dropdown-toggle\" data-toggle=\"dropdown\"><i class=\"tdb-search-icon td-icon-search\"><\/i><\/a><\/div>\n<div class=\"tdb-block-inner td-fix-index\"><\/div>\n<div class=\"tdb-block-inner td-fix-index\">\n<h1 class=\"tdb-title-text\">Eaton fire could bankrupt California&rsquo;s $21 billion wildfire fund<\/h1>\n<div><\/div>\n<div class=\"tdb-title-line\"><\/div>\n<\/div>\n<div class=\"tdb-block-inner td-fix-index\"><\/div>\n<div class=\"tdb-block-inner td-fix-index\"><\/div>\n<div class=\"tdb-block-inner td-fix-index\">\n<div id=\"Brid_1073697\" class=\"tpd-featured-video bridtv\"><\/div>\n<p>The&nbsp;seven-member <a href=\"https:\/\/www.cawildfirefund.com\/council\" target=\"_blank\" rel=\"noopener\" title=\"California Catastrophe Response Council\">California Catastrophe Response Council<\/a> is expected to meet Thursday to discuss damage claims from the devastating <a href=\"https:\/\/www.washingtonexaminer.com\/policy\/energy-and-environment\/3307797\/lawsuit-alleges-video-footage-of-electric-spark-shows-origin-of-eaton-fire-profits-over-safety\/\" target=\"_blank\" rel=\"noopener\" title=\"Eaton fire\">Eaton fire<\/a> and the growing concern that those claims could&nbsp;wipe out the $21 billion fund created by the state to shield utilities from the <a href=\"https:\/\/www.washingtonexaminer.com\/tag\/fires\/\" target=\"_blank\" rel=\"noopener\" title=\"cost of wildfires\">cost of wildfires<\/a> sparked by electric lines.&nbsp;<\/p>\n<p>If <a href=\"https:\/\/www.sce.com\/\" target=\"_blank\" rel=\"noopener\" title=\"\">South California Edison&rsquo;s<\/a> equipment is found responsible for&nbsp;starting the Jan. 7 fire, which killed 19 people and destroyed more than 9,000 homes, &ldquo;the resulting claims may be substantial&nbsp;enough to fully exhaust the Fund,&rdquo; state officials who administer the fund wrote in a draft annual report to the California legislature.&nbsp;<\/p>\n<div class=\"recommended-stories\">\n<h2>Recommended Stories<\/h2>\n<ul>\n<li><a href=\"https:\/\/www.washingtonexaminer.com\/news\/investigations\/3477794\/vapor-technology-association-illegal-chinese-vapes-cash-manufacturers\/\">Major trade association claims to oppose &#8216;illicit&#8217; Chinese vapes after raking in cash from their manufacturers<\/a><\/li>\n<li><a href=\"https:\/\/www.washingtonexaminer.com\/news\/investigations\/3478970\/who-is-ghislaine-maxwell-what-can-the-trump-administration-do-to-make-her-speak-epstein\/\">Who is Ghislaine Maxwell, and what can the Trump administration do to make her speak truthfully about Epstein?<\/a><\/li>\n<li><a href=\"https:\/\/www.washingtonexaminer.com\/news\/investigations\/3478442\/hhs-reform-system-organ-transplant-investigation-disturbing-practices\/\">HHS to reform organ transplant system after investigation finds &#8216;disturbing practices&#8217;<\/a><\/li>\n<\/ul>\n<\/div>\n<div class=\"article-paywall\">\n<figure class=\"wp-block-image size-full\"><figcaption class=\"wp-element-caption\">A firefighter adjusts his helmet as he looks at a Bank of America building on Lake Avenue engulfed in flames during the Eaton Fire, Wednesday, Jan. 8, 2025, in Altadena, California. (AP Photo\/Chris Pizzello)<\/figcaption><\/figure>\n<p>There have been worries that if Edison is found liable, it would have little incentive to contain damage claims since the utility itself would be spared from covering most of the associated costs, the<em> Los Angeles Times<\/em> <a href=\"https:\/\/www.latimes.com\/environment\/story\/2025-07-23\/eaton-fire-could-wipe-out-21-billion-state-wildfire-fund-new-documents-say\" target=\"_blank\" rel=\"noopener\" title=\"reported\">reported<\/a> Wednesday.<\/p>\n<p>Basically, the utility would pay the claims and then recoup the costs from the wildfire fund.&nbsp;<\/p>\n<p>&ldquo;Are we impressing on the utilities that they need to settle claims with diligence?&rdquo; a councilmember wrote in meeting materials released ahead of Thursday&rsquo;s face-to-face. &ldquo;Since the claims they settle are just passed on to us, they don&rsquo;t have the incentive to keep claims low.&rdquo;&nbsp;<\/p>\n<p>State documents show that costs in <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/biden-issues-disaster-declaration-for-texas-amidst-severe-winter-weather\/\" title=\"Biden Issues Disaster Declaration For Texas Amidst Severe Winter Weather\">insured property losses<\/a> alone could surpass $15 billion. That amount doesn&rsquo;t cover uninsured losses or wrongful-death claims, which will likely pile up.<\/p>\n<p>A March <a href=\"https:\/\/www.anderson.ucla.edu\/about\/centers\/ucla-anderson-forecast\/economic-impact-los-angeles-wildfires\" target=\"_blank\" rel=\"noopener\" title=\"study\">study<\/a> by the University of California, Los Angeles, <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/disasters-caused-total-of-122-billion-in-insured-losses-in-2022-swiss-re\/\" title=\"Disasters Caused Total of 2 Billion in ... in 2022: Swiss Re\">estimated insured losses<\/a> from the fire could hit $45 billion.<\/p>\n<p>The study also found that the fires accounted for a 0.48% decline in county-level GDP for 2025 and a total wage loss of $297 million for local businesses and employees in affected areas. It also stressed that without substantial and effective wildfire mitigation efforts and investments, Californians will <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/msnbc-medical-contributor-wants-a-separate-triage-list-for-the-unvaxxed-joy-reid-wants-them-to-pay-more\/\" title=\"MSNBC Medical Contributor Wants A Separate Triage List For The Unvaxxed \u2014 Joy Reid Wants Them \u2018To Pay More\u2019\">face higher insurance premiums<\/a> and that the housing market in Los Angeles, particularly for rental units, will become increasingly&nbsp;unaffordable.&nbsp;<\/p>\n<p>California&rsquo;s handling of the Eaton fires has been abysmal&nbsp;at best and threatens to defund the very insurance policy lawmakers created to prevent such an occurrence.&nbsp;<\/p>\n<p>On top of that,&nbsp;<a href=\"https:\/\/www.washingtonexaminer.com\/tag\/hedge-funds\/\" target=\"_blank\" rel=\"noreferrer noopener\">hedge funds<\/a>&nbsp;are swooping in to buy possible&nbsp;<a href=\"https:\/\/www.washingtonexaminer.com\/tag\/insurance-industry\/\" target=\"_blank\" rel=\"noreferrer noopener\">insurance claims<\/a>&nbsp;tied to the&nbsp;fire, which has also rattled state officials and raised ethical concerns about profiting from catastrophes.<\/p>\n<p>The investors are targeting so-called&nbsp;<a href=\"https:\/\/www.eatonfireca.com\/?gad_source=1&amp;gad_campaignid=22197385857&amp;gbraid=0AAAAAq6kPsdHT6qEaDsvZ05l789JNMlp8&amp;gclid=CjwKCAjwmenCBhA4EiwAtVjzmlfn2EzPw82RurawppUSZXqgAU49nqCF_rmx6VLYoKNbnnC_aDN59BoCJiEQAvD_BwE\" target=\"_blank\" rel=\"noreferrer noopener\">subrogation claims<\/a>, a process in which&nbsp;an insurance company assumes the legal right to seek repayment from the third party responsible for the damage after paying a policyholder for a loss.<\/p>\n<p>In the Eaton fire case, hedge funds are trying to buy claims and then use the&nbsp;legal rights insurers hold to seek reimbursement from&nbsp;Edison&nbsp;if the utility is found liable for sparking the January blaze. Recovering subrogation claims is often expensive and time-consuming, prompting insurers to sell them off in return for immediate cash payments.&nbsp;While the solicitations are legal, they&rsquo;ve drawn sharp criticism from state leaders.<\/p>\n<p>For insurers, selling the claims, often at deep discounts, allows them to recoup at least some of the billions already paid to policyholders. For hedge funds, it&rsquo;s a bit riskier. They will be able to make money only if Edison is found liable. But if Edison is found to be at fault, they would hit paydirt.&nbsp;<\/p>\n<p>California officials argue they have a stake in the deals because of their possible effect on the state&rsquo;s wildfire fund, which has about $21 billion.<\/p>\n<p>California law requires the state wildfire fund to reimburse Edison for insurers&rsquo; payments to policyholders if electrical equipment caused the fire. The wildfire fund was created in 2019 to protect the state&rsquo;s for-profit utilities, including Edison, from bankruptcy if their equipment starts destructive wildfires.&nbsp;<\/p>\n<p>If Edison is found liable, it could wipe out the fund and be forced to pay &ldquo;hundreds of millions, if not billions&rdquo; more than if the claims were settled directly by investors, the&nbsp;<em>Los Angeles Times&nbsp;<\/em><a href=\"https:\/\/www.latimes.com\/environment\/story\/2025-06-24\/wall-street-investors-try-to-profit-from-eaton-fire-insurance-claims\" target=\"_blank\" rel=\"noreferrer noopener\">reported<\/a>.&nbsp;<\/p>\n<p><strong><a href=\"https:\/\/www.washingtonexaminer.com\/opinion\/editorials\/3478336\/california-focus-governing-not-redistricting\/\" target=\"_blank\" rel=\"noopener\" title=\"CALIFORNIA SHOULD FOCUS ON GOVERNING, NOT REDISTRICTING \">CALIFORNIA SHOULD FOCUS ON GOVERNING, NOT REDISTRICTING <\/a><\/strong><\/p>\n<p>&ldquo;That would really, very negatively impact the durability of the wildfire fund,&rdquo; Tom Welsh, CEO of the California Earthquake Authority, which oversees the state&rsquo;s wildfire fund, said.&nbsp;<\/p>\n<p>He added that brokers at Oppenheimer &amp; Co. in New York had informed him that they were trading 10 subrogation claims worth more than $1 billion in recovery rights.<\/p>\n<\/div>\n<p> <script data-cfasync=\"false\" src=\"http:\/\/www.washingtonexaminer.com\/cdn-cgi\/scripts\/5c5dd728\/cloudflare-static\/email-decode.min.js\"><\/script><script>!function(){var g=window;g.googletag=g.googletag||{},g.googletag.cmd=g.googletag.cmd||[],g.googletag.cmd.push(function(){g.googletag.pubads().setTargeting(\"has-featured-video\",\"true\")})}();<\/script><script>var _bp=_bp||[];_bp.push({\"div\":\"Brid_1073697\",\"obj\":{\"id\":\"27789\",\"width\":\"1280\",\"height\":\"720\",\"stickyDirection\":\"below\",\"video\":\"1073697\"}});<\/script><script defer src=\"https:\/\/services.brid.tv\/player\/build\/brid.min.js\"><\/script><\/div>\n<div class=\"tdb-block-inner td-fix-index\"><\/div>\n<div class=\"tdb-block-inner td-fix-index\"><\/div>\n<p><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Eaton fire may exhaust California&#8217;s $21B wildfire fund<\/p>\n","protected":false},"author":2646,"featured_media":2465715,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/www.washingtonexaminer.com\/wp-content\/uploads\/2025\/01\/California-wildfires-firefighters-water-ll31.webp","fifu_image_alt":"","footnotes":""},"categories":[33651],"tags":[59731,49013,59732,48446,59733],"class_list":["post-2465714","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-western-journal","tag-california-wildfire-fund","tag-eaton-fire","tag-fire-bankruptcy","tag-wildfire-damage","tag-wildfire-funding-crisis"],"fifu_image_url":"https:\/\/www.washingtonexaminer.com\/wp-content\/uploads\/2025\/01\/California-wildfires-firefighters-water-ll31.webp","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2465714","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/2646"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2465714"}],"version-history":[{"count":3,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2465714\/revisions"}],"predecessor-version":[{"id":2465718,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2465714\/revisions\/2465718"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2465715"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2465714"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2465714"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2465714"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}