The California fire put an insurance company out of business
Wednesday, December 5, 2018, 1:27 PM - A company that was founded to protect homeowners is the latest casualty to come from California's recent fires.
Merced County Insurance Company has announced it is going out of business because it can't pay out the expected fire-related claims.
California's November Camp Fire was one of the deadliest in the state's history and thousands of people have been left without homes.
(WINTER IS HERE: How will El Niño shape Canada's upcoming winter? Find out with The Weather Network’s 2019 Winter Forecast | FORECAST & MAPS HERE)
"It completely overwhelmed this company," Nacy Kincaide of California's Department of Insurance told CNN.
"Looking at the number of claims that they would have ... it left them insolvent."
A judge approved liquidation proceedings Monday at the Merced County superior courthouse.
Documents suggest the company faces $64 million in outstanding liabilities in the Paradise community, but their assets sit at about $23 million.
The California Insurance Guarantee Association (CIGA) will take over the outstanding claims and work with policy holders.
Wayne Wilson of CIGA believes a big reason Merced insurance went out of business was because of its location and client base.
"It was heavily concentrated in the Sacramento, central valley, and didn't write in other places, so it didn't have a lot of spread of risk," he told CNN.
CIGA hopes to start working on the outstanding claims next week.