A real estate investor, Robert Rivani, spent $27 million on a luxury mansion on Malibu’s “Billionaire’s Beach.”
After a devastating wildfire destroyed the home, he expects only $3 million from insurance.
The Fire’s Impact
The Palisades fire, which has burned over 23,700 acres, destroyed Rivani’s five-bedroom mansion, which he had planned to sell for $40 million this spring.
Many other high-end homes in Malibu have also been lost, with officials estimating 5,300 structures damaged or destroyed.
Rivani shared his frustration, saying, “How do you value land that’s completely burnt, with no restaurants, stores, or power left?”
Limited Insurance Coverage
No private insurance company would cover Rivani’s home for its full value, so he turned to California’s FAIR Plan, which caps residential payouts at $3 million.
To make matters worse, Rivani still faces mortgage and property tax bills exceeding $100,000 per month.
He criticized the lack of preparedness, saying, “We pay huge property taxes, but there aren’t working fire hydrants? It’s shocking.”
Strain on California’s Insurance Market
California’s insurance system has been struggling due to frequent disasters.
Many major insurers, like State Farm, have pulled back from covering wildfire-prone areas like Pacific Palisades.
This has forced homeowners to rely on the FAIR Plan, which now insures $458 billion in residential properties.
New Insurance Rules Could Bring Higher Costs
California recently announced new regulations requiring insurers to offer more coverage in wildfire zones.
However, consumer advocates warn this could lead to steep rate hikes of 40% to 50%.
The state’s insurance commissioner disputes those numbers but admits changes are needed to help homeowners in high-risk areas.
A Historic Disaster
The wildfires have caused damages estimated at $135 billion to $150 billion, making them one of the worst in U.S. history.
Officials are investigating infrastructure failures, such as the lack of water from fire hydrants, which worsened the crisis.
Rivani, like many others, is left wondering how California can better prepare for the future while dealing with the aftermath of such a massive disaster.