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CA insurance crisis: Thousands to lose coverage as two more insurers withdraw

sfchronicle.com

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Re: CA insurance crisis: Thousands to lose coverage as two more insurers withdraw

#11

Post by dangus »

alephnerd wrote: post #9

The major reason insurers are leaving is because California has been considering enforcing Prop 103 recently, which has begun spooking insurance providers into leaving. The Insurance Commissioner is also an elected position now, so there is an incentive for them to succumb to populist pressures to climb up the poltical ladder (eg. Governer, Senator, Congressmember) Edit: listen to CharlesW. I'm incorrect on the fact…

Huh? Prop 103 is from 1988.

The article cites wildfires and close proximity of buildings (again, wildfires) as reasons to withdraw.

Re: CA insurance crisis: Thousands to lose coverage as two more insurers withdraw

#12

Post by alephnerd »

dangus wrote: post #11
alephnerd wrote: post #9

The major reason insurers are leaving is because California has been considering enforcing Prop 103 recently, which has begun spooking insurance providers into leaving. The Insurance Commissioner is also an elected position now, so there is an incentive for them to succumb to populist pressures to climb up the poltical ladder (eg. Governer, Senator, Congressmember) Edit: listen to CharlesW. I'm incorrect on the fact…

Huh? Prop 103 is from 1988. The article cites wildfires and close proximity of buildings (again, wildfires) as reasons to withdraw.

Yep! But Lara only recently threated to bring in enforcement after negotiations with Insurers over liability failed [0]

It's never actually been enforced before in CA.

Edit: listen to CharlesW. I'm incorrect on the fact that it wasn't enforced until recently

[0] - https://www.politico.com/newsletters/california-climate/2023...

Re: CA insurance crisis: Thousands to lose coverage as two more insurers withdraw

#13

Post by DoreenMichele »

To be clear: California home owners insurance.

One factor listed: post earthquake fires.

California has "fire season," not a season I ever wanted in my life. I wonder how much this is actually kind of an issue of global warming without being called that. My understanding is fires are getting worse on the west coast thanks to climate change.

Re: CA insurance crisis: Thousands to lose coverage as two more insurers withdraw

#14

Post by PHGamer »

alephnerd wrote: post #7
sp332 wrote: post #4

Earlier quoted context omitted.

What's the price fixing part?

California has been considering enforcing Prop 103 recently, which has begun spooking insurance providers into leaving. The Insurance Commissioner is also an elected position now, so there is an incentive for them to succumb to populist pressures to climb up the poltical ladder (eg. Govenor, Senator, Congressmember) Edit: listen to CharlesW. I'm incorrect on the fact that it wasn't enforced until recently

insurance is a scam anyways. the only reason it works is because nothing is supposed to happen. howevever, shit has been happening (thanks to weak enforcement of laws) and their easy profit margins are being lost because asset values have balooned

Re: CA insurance crisis: Thousands to lose coverage as two more insurers withdraw

#15

Post by timr »

dangus wrote: post #11
alephnerd wrote: post #9

The major reason insurers are leaving is because California has been considering enforcing Prop 103 recently, which has begun spooking insurance providers into leaving. The Insurance Commissioner is also an elected position now, so there is an incentive for them to succumb to populist pressures to climb up the poltical ladder (eg. Governer, Senator, Congressmember) Edit: listen to CharlesW. I'm incorrect on the fact…

Huh? Prop 103 is from 1988. The article cites wildfires and close proximity of buildings (again, wildfires) as reasons to withdraw.

The article also mentions that one of the proposed fixes is to allow forward pricing of the insurance market, and more flexible rate change regulations.

Right now, California does not allow pricing of insurance policies except on a few non-standard factors. These factors do not include "proximity to wildfire risk areas", which means that insurers lost a lot of money in the big wildfires of 2017-2018. The state refuses to change, so the insurers are pulling out of the market.

Framing this as "because of wildfires" is technically true, but misses the point. The problem is that insurers in CA can't accurately price for wildfire risk.

Re: CA insurance crisis: Thousands to lose coverage as two more insurers withdraw

#16

Post by mistrial9 »

the basic elephant in the room is that in the years 2017, 2018 and 2020.. there were unprecedented losses due to fire.

The right way to look at this negotiation.. a power-play between goliaths.. is that losses occurred on a scale and severity that no one predicted.. now, years later the markets are trying to find a way to do business in insurance

Re: CA insurance crisis: Thousands to lose coverage as two more insurers withdraw

#18

Post by CharlesW »

alephnerd wrote: post #7
sp332 wrote: post #4

Earlier quoted context omitted.

What's the price fixing part?

California has been considering enforcing Prop 103 recently, which has begun spooking insurance providers into leaving. The Insurance Commissioner is also an elected position now, so there is an incentive for them to succumb to populist pressures to climb up the poltical ladder (eg. Govenor, Senator, Congressmember) Edit: listen to CharlesW. I'm incorrect on the fact that it wasn't enforced until recently

> California has been considering enforcing Prop 103 recently…

Nope, it's been enforced since the start. Right after it passed, insurance companies refunding over $1.2 billion to consumers based on CDI enforcement.

https://consumerfed.org/pdfs/whatworks-report_nov2013_hunter...

Re: CA insurance crisis: Thousands to lose coverage as two more insurers withdraw

#19

Post by CharlesW »

alephnerd wrote: post #12
dangus wrote: post #11

Earlier quoted context omitted.

Huh? Prop 103 is from 1988. The article cites wildfires and close proximity of buildings (again, wildfires) as reasons to withdraw.

Yep! But Lara only recently threated to bring in enforcement after negotiations with Insurers over liability failed [0] It's never actually been enforced before in CA. Edit: listen to CharlesW. I'm incorrect on the fact that it wasn't enforced until recently [0] - https://www.politico.com/newsletters/california-climate/2023...

> It's never actually been enforced before in CA.

Incorrect, it's been enforced since it passed. Soon after it passed, insurance companies refunded over $1.2 billion to consumers based on California Department of Insurance (CDI) mandates. You can find many more examples.

https://consumerfed.org/pdfs/whatworks-report_nov2013_hunter...

Re: CA insurance crisis: Thousands to lose coverage as two more insurers withdraw

#20

Post by tehlike »

DoreenMichele wrote: post #13

To be clear: California home owners insurance. One factor listed: post earthquake fires. California has "fire season," not a season I ever wanted in my life. I wonder how much this is actually kind of an issue of global warming without being called that. My understanding is fires are getting worse on the west coast thanks to climate change.

As far as i can tell, california forest management essentially ended up suppressing "good fires", and didn't do enough of controlled burns, which ended up accumulating a lot of fuel to cause large fires.
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