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Before a wildfire ravaged their street in northwest Altadena, Louise Hamlin and Chris Wilson lived next door to each other in nearly identical houses. I chose an old home in an old neighborhood because it has soul, said Hamlin, a 51-year-old single mom with a teenage boy, who bought her 1,500-square-foot home 10 years ago. Today, gone are their charming English-style cottages built in 1925 with the welcoming porches and Palladian windows. Amid the rubble and ash, little is left of their historic neighborhood. In the weeks since the Eaton wildfire took their homes, Hamlin and Wilson have been stumbling through the layers of business, bureaucracy, and emotional trauma of surviving a natural disaster, with their sights firmly set on rebuilding. How theyll navigate rebuilding is a story of contrasting fortunes and unequal recovery that reveals the nations growing home insurance crisis. Her insurance has already paid out nearly a million dollars and she is searching for contractors. He is contemplating loans, lawsuits, and moving his family out of California. It changes the whole trajectory to your life, said Wilson, 44, who bought his house five years ago with his wife, who is six months pregnant with their first child. The Unfair Plan Hamlins home was privately covered by Mercury Insurance, but Wilson was forced onto the California Fair Access to Insurance Requirements Planthe states bare-bones insurance programwhen SafeCo declined to renew his policy last May. The FAIR Plan insures people who cant get private coverage but need insurance as a condition of their mortgage. As wildfires, hurricanes, and other natural disasters become more frequent due to climate change, many property owners find themselves struggling to find or afford private insurance. The issue is particularly acute in California, where some major insurance companies have stopped writing new policies altogether or are refusing to renew existing ones. State officials recently started rolling out new regulations to entice insurers to stay in California, with the hope of getting as many homeowners as possible off the FAIR Plan. FAIR, with its high premiums and basic coverage, was designed as a temporary safety net until policyholders find a more permanent option. Yet the number of FAIR Plan residential policies more than doubled from 2020 to 2024, reaching nearly 452,000 policies last year. For Wilson and Hamlin, their parallel rebuilding journeys serve as a cautionary tale. Wilson paid nearly 60% more in premiums related to the fire than Hamlin, for less than half the coverage. Thats why a lot of people call it ‘The Unfair Plan.” said Amy Bach, executive director of the consumer advocacy group United Policyholders. SafeCo’s parent company Liberty Mutual said in a statement that it couldn’t comment on any individual policies but acknowledged difficult but purposeful business decisions in California. Mercury didnt respond to requests for comment. Janet Ruiz, spokesperson for the Insurance Information Institute, which represents many major insurance companies, said California is fortunate to have the FAIR Plan, which is required to accept everyone. Ruiz said outcomes would be even worse if homeowners had no coverage at all. Insurance Commissioner Ricardo Lara said California is working to make sure all claims are paid. He said in a statement that his office is working to get homeowners off the FAIR Plan and back to traditional more comprehensive insurance coverage. A FAIR Plan spokesperson declined to comment on Wilsons case, and noted that its difficult to compare policies and coverage. 31,000 wildfire claims Thousands of people lost their homes in the Eaton and nearby Palisades Fires, which were among the most destructive in California history. The FAIR Plan said it expanded staffing to meet the surging demand and has a funding mechanism in place to pay all covered claims. State data shows more than 31,000 wildfire-related claims had been filed as of last week, including roughly 4,400 claims under the FAIR Plan. Hamlin had standard comprehensive home insurance, with an annual policy premium of $1,264 at the time of the fire. She can receive up to $1.5 million to replace her home, other structures, and personal property, including up to $303,000 for living expenses while displaced. Her policy further entitles her to coverage that could add more than $200,000 to help her rebuild. Wilson, meanwhile, pays a $2,000 premium for the FAIR Plan that sets his maximum payout at $686,000, including $100,000 for living expenses while displaced. Wilson also had to buy wrap-around insurance for $1,500 a year for issues the FAIR Plan doesnt cover, such as burst pipes or falling objects. That supplemental plan doesnt cover fire damage. Hamlin said Mercury’s support has been exceptional, immediately sending her money and helping with next steps such as finding housing and getting contractor quotes. Within days, the company wired her tens of thousands of dollars to get started while the process fell into place. Being able to rest at night and wake up and deal with everything else is really important, Hamlin said. Meanwhile, Wilson has struggled to even talk to a FAIR Plan representative. There was zero communication in the first two weeks, contact information was listed incorrectly, phone numbers had no voicemail, and emails bounced back. Half the time, I feel like Im doing something wrong, Wilson said. After the Associated Press reached out for comment, Insurance Department spokesperson Michael Soller said a representative would contact Wilson directly. Its just luck, really’ Wilson said he feels haunted by his choices. He thought he had bought property in a low-risk area, and had avoided looking for homes in another neighborhood further north after hearing that people there had been dropped by their insurers. Hamlin, too, was aware of the fire risks when she moved in. She previously lived in Pasadena and was surprised that State Farm, her then-insurance company, would not offer her coverage in Altadena. She chose Mercury because it was the cheapest option, and was considering pursuing even more robust coverage. I could have been dropped when Chris was dropped. Any of us could be at any time. Its just luck, really. Its nothing I did or didnt do, Hamlin said, stunned by the comparison. I had the same risk factors as everyone else. Stephen Collier, a professor of urban planning at University of California, Berkeley, said the seemingly random nature of who gets dropped and when has much to do with insurance companies’ complicated risk models. Theyre all trying to manage their exposure, Collier said. If you think about wildfires, you dont want concentrated exposure. Wilson said SafeCo requested an inspection of his property before deciding not to renew his policy. Panicked, he tried unsuccessfully to negotiate with them, offering to clear brushes, trim trees near the roof, and other wildfire mitigation efforts. Wilson shopped around aggressively with his insurance agent but to no avail, and resigned himself to the FAIR Plan, assuming he would eventually find private insurance again. There was another catch: Wilson said he couldnt get comprehensive replacement cost coverage on the FAIR Plan because his roof was too old. Instead, he ended up with what is known as actual cash value coverage, which greatly limits the payout based on the physical depreciation of what was lost. Were talking hundreds of thousands of dollars and thats very, very painful, said Bach of United Policyholders. An uninsurable future Citing rising fire risks and other problems, seven of the top 12 insurance companies either paused or restricted new business in California in 2023. State regulations give insurers more latitude to raise premiums in exchange for issuing policies in high-risk areas, including consideration of climate change in premiums and passing the costs of reinsurance to consumers. But those are only short-term solutions, said Dave Jones, California’s insurance commissioner from 2011 to 2018. He pointed to Florida, where officials have done everything the insurers asked California to do but yielded little success. Were marching steadily towards an uninsurable future in the United States because were not doing enough fast enough to address the underlying cause, which is climate change, Jones said. Unless governments take on the financial burden of serious mitigation efforts, the price of Californias fire risk will remain unequal and left to the homeowners, Collier of UC Berkeley said. That could be the underinsuredlike Wilsonswallowing their personal losses, or all California homeowners collectively saddled with increased premiums, or both. State Farm, Californias largest insurance company, this week urged the state to approve an emergency rate hike of 22% for homeowner policies starting in May after processing nearly 8,700 claims and paying out more than $1 billion to policyholders for the LA fires. Theres a huge amount of risk in the system and theres a big question of who is going to pay for this, Collier said. Wilson expects hell have to take out loans to rebuild. Hes considering joining a lawsuit against Southern California Edison that alleges the utilitys equipment sparked the blaze, in hopes of receiving settlement money. But with a baby on the way, Wilson said he cant fathom living in limbo on the FAIR Plan forever, and hes thinking about leaving California if private insurance remains out of reach. I dont want to have to be prepared to maybe lose everything again, Wilson said. Stuck paying for an insurance that doesnt cover anything. You dont want to live in a risky area. You dont have the safety net. Sally Ho and Trān Nguyn, Associated Press Associated Press data journalist Aaron Kessler contributed to this report.
Category:
E-Commerce
When Joe Biden left office last month, he did so having forgiven more student loan debt than any of his predecessorsa total of $188.8 billion for 5.3 million borrowers over his four-year term. And yet, at the end of 2024, the total outstanding federal student loan debt was roughly $1.7 trillion, held by nearly 43 million borrowers. Thats more than when Biden took office. So, despite a four-year stretch during which the Biden administration actively forgave billions, it seemingly didnt put a dent in the overall student debt balance. How can that be? Its complicated, and there were several factors at play. For one, there was a long pause in student loan repayments due to the pandemic, during which borrowers were not required to make any payments and their loans didnt accrue any interest, for a roughly three-and-a-half-year period between March 2020 and September 2023. During that time, borrowers were still able to borrow, adding to overall debt counts, but payments werent coming in to counteract it. The net effect? Total debt tallies increased. Additionally, college tuition and fees have continued to rise at an average of 7% annually over the past 20 years. Those additional costs mean that each years new crop of borrowers are taking on more debt than the ones before them, and many of those new borrowers are years away from starting repayments, presumably after they earn their degrees and enter the workforce. Why Biden’s loan forgiveness didn’t lower aggregate student debt In all, the Biden administration forgave around 12% of outstanding student federal loan debt, says Mark Kantrowitz, a higher education and financial aid expert. But the total forgiveness was only $188 billion, which is the amount of new debt that accumulates in about two years. So, it was a two-steps forward, one-step back situation, he says. In other words, the crosscurrents at playmore debt, less progress in paying down current debt, and Bidens forgiveness programsled us to a place where more debt accumulated over the past four years. We also dont know how many people are actively repaying their loans after the pandemic-era pause, as the data has yet to be released, Kantrowitz says. But he does think that were likely to see total student debt levels increase with Trump back in office. Thats because theres likely to be fewer, if any, new forgiveness programs, a scaling back of existing programs, and perhaps more lender-friendly legislation. Effectively, the environment could be the opposite of the Biden era’s. What’s causing the student loan crisis? Bidens measures, which were of a higher caliber than any of his predecessors’, werent enough to reverse the total debt balance from rising. Getting to the heart of the issue may require looking deeper at what’s actually causing the student loan crisis. According to a September 2024 analysis by academic researchers Adam Looney and Constantine Yannelis and published by the Brookings Institution, part of the problem may be unintended consequences. The federal government wanted to make college degrees more affordable and attainable to more Americans, so it changed federal aid rules allowing for more people to access funding to pay for school. While those were noble aims, it isnt necessarily what happened. This led to rising enrollment of relatively disadvantaged students, but the increase was primarily at poor-performing, low-value institutions whose students systematically failed to complete a degree, struggled to repay their loans, defaulted at high rates, and floundered in the job market, the report reads. “As these new borrowers experienced similarly poor outcomes, their loans piled up, loan performance deteriorated, and with it the finances of the federal program. Kantrowitz agrees that students failing to earn their degrees is likely a focal point of the issue. Im not one of those people who believe that theres a student loan problem that needs to be fixed, he says, so much as that we have a college completion problem. He claims that the borrowers who generally have trouble repaying their loans and end up in dire financial situations as a result are those who take on debt, but dont graduatethey pay a financial penalty but dont reap the rewards in terms of career and earning opportunities that a college degree provides. With that in mind, Kantrowitz thinks that getting students to actually graduate may be the single biggest step we can take to help ease the pain of overall student debt balances. What we need to do is find better ways to get students to the finish line, he says. If they get a degree that has value, they should be able to repay the student loans.
Category:
E-Commerce
Chipotleone of the original and most influential fast-casual spots in the countryjust hit a major milestone. In 2024, they opened 304 new restaurants, marking the highest number of openings in a single year in their franchise history, according to a Tuesday earnings call. For a bit of context, they opened 271 locations in 2023, and in the two years before that, they were hovering just above 200 each year. And the growth isn’t slowing downthey’re planning to open between 315 and 345 new restaurants in 2025. The fast-casual juggernaut also reported a total revenue of $11.3 billionan increase of 14.6% from last years $9.9 billion. The chains operating margin and diluted earnings per share also increased. Chipotle had another outstanding year, CEO Scott Boatwright said during the call. “I want to make sure that as we continue to scale Chipotle, everything we do is in service of our guests or those who serve our guests. While Chipotle excelled in 2024, many fast-casual competitors struggled to stay afloat, with many beloved chains shutting down or filing for bankruptcy in the past year. The majority of Wahlburgers locations shut down in January after its partnership with midwestern grocery store Hy-Vee ended. Roti, a chain that pioneered mediterranean-style fast casual, filed for Chapter 11 bankruptcy protection in August. Red Lobster and Buca di Beppoboth former giants of their fieldalso filed for bankruptcy last year. But other competitors like Cava and Sweetgreen have experienced record highs similar to Chipotle. Overall, comparable restaurant sales still increased by 7.4%, a little more than half of Chipotles growth. And Chipotles expansion comes at a time of reinvention for the restaurant that transformed fast-casual from a concept to a cultural zeitgeist with its fully customizable Mexican-style entrees. After Chipotle dealt with an onslaught of food safety scares from 20152018, CEO Brian Niccols stepped indoubling the brands revenue over five years. He added loyalty programs, drive-throughs, delivery options, and even robot chefs to the chains repertoire of enticing customer-facing features. But Niccols abruptly left the position in September to run Starbucks, leaving former COO Boatwright as his successor. Since Boatwrights ascension, the company raised menu prices, drawing consumer outrage, after promising to increase portions. The company has also struggled with adjusting wages to inflation. Boatwight said on the earnings call that long-term goals for the company include reaching 7,000 total restaurants in North America (there are currently 3,700 worldwide) and becoming a global iconic brand.
Category:
E-Commerce
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