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Any wise business will get the hell out of these deep blue states.
Oh, I'm saving this one. Florida says what about home insurance in California?
Quote:
Originally Posted by Bobdreamz
It's funny because we have a huge Property Insurance crisis here in Florida too especially after the two Hurricanes that hit last year but since it's DeSantis nobody even mentions it.
Over 9 Insurance carriers have left Florida and he nor the GOP Legislature has fixed this problem but hey priorities first like Drag Queens, Disney and CRT !
An honest poster and unfortunately I can't rep you again. When NINE insurance carriers leave Florida it's not news. But ONE insurance carrier leaves California and it's major.
Insurance Companies Are Quietly Fleeing California
...It would never dawn on the state’s political leadership to invest in infrastructure improvements before near-catastrophic failures stressed levees to the breaking point. Nor would it occur to them to invest in water infrastructure. Shortly before the storms, which brought nearly as much rain in three weeks as California had experienced in a year, the state was already facing another weather-related crisis: a mega-drought that led to water rationing. Such a problem had long been predicted, yet until recently the state didn’t move urgently to approve new desalination plants or improve infrastructure.
The recent floods and wildfire season have also have saddled insurance companies with as much as $1.5 billion in losses. Insurance markets could weather these blows, but California’s government-controlled insurance system won’t let them.
Thus, insurers are pulling out of the state or reducing their underwriting, leaving many homeowners dependent on the bare-bones insurer of last resort: the state-created (though insurer-funded) Fair Access to Insurance Requirements Plan. As Jerry Theodorou, an R Street Institute insurance expert, observed in the Orange County Register, the number of FAIR Plan policies has increased 240% since 2017.
State Farm cut and ran after Hurricane Andrew belted south Florida years ago.
Not surprised. When I was teaching ESL overseas, I would show a video about hurricanes/ tornadoes to my students. There was footage of the devastation caused by Hurricane Andrew after it reached shore.
The area was flattened. Most surprising (or miraculous is how the commentator describes it) was how few deaths there were. 44 according to the video but not sure if that's correct.
The California department of insurance under state law has the ability to refuse to let companies raise prices or drop policies where they are loss making while continuing to do business in the rest of the state. The current commissioner for the last four years has been using this power excessively. The result is losses > premiums and at best companies stop advertising, make it difficult to buy a policy, fire salespeople, decertify brokers that sell too much hoping to pause growth until the situation changes and if the losses get too large or hope for a return to sound rates soon gets too weak pull out of the state entirely.
None of the problems they cite would force them out of the state if they could set appropriate prices, premiums would just go up and people could have the choice of either paying them or finding a different insurer if they weren't competitive anymore.
At the end of the day insurers need to be able to run at least a small profit or will stop writing policies.
State Farm is a mutual insurance company that doesn't even have stockholders to please, but they do have to make a small profit to expand business...and to not lose money.
State Farm General Insurance Company®, State Farm’s provider of homeowners insurance in California, will cease accepting new applications including all business and personal lines property and casualty insurance, effective May 27, 2023. This decision does not impact personal auto insurance. State Farm General Insurance Company made this decision due to historic increases in construction costs outpacing inflation, rapidly growing catastrophe exposure, and a challenging reinsurance market.
The reason states like California, Florida, Louisiana etc. are undergoing these difficulties has a lot to do with climate change (the "catastrophe exposure" mentioned in the original post), yet no one seems to mention it. In fact, for Republicans to even acknowledge this is like touching the third rail, instant political death.
We have been building in places that that will continue to undergo changes we can't stop. Wildfires are more frequent as are big windstorms and hurricanes. We are experiencing serious erosion in many places, including mudslides and sinkholes, and some of those dream homes perched in idyllic settings with great views or beaches will be very expensive to replace. Insurance companies are all about assuming risk, and it comes at a price.
If the insurance company can't make a profit it needs to stop assuming risk. They need to stop writing policies.
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