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Insurance companies say that because they can’t consider climate change in their rates, it makes it difficult to truly price the risk for properties."
https://apnews.com/article/california-home-insurance-wildfir...
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.
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 refuse…
They also tend to be the more anti-government types. One family in an unincorporated part of the mountains refused to pay the voluntary firefighter service fee. When their home caught on fire the firefights just watched it and put out the parts that threatened a neighbor's house who did pay the fee.
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.
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
The house made some bad bets, the players “won” a few hands, and now the house is backing those players off while they figure out how to rig the game again.
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.
Re-insurance rates have gone through the roof through 3-4 weather events over the past 2 years. No signs of slowing down...
But on the other hand, because state regulators are slow to react or adapt to changing circumstances, they essentially freeze the market and the parameters allowed for sales of insurance in the past, for circumstances that may no longer exist.
So, new risks and willingness to insure are not accounted for, and companies no longer find it profitable to do business with rules of the past, in the present.
I live in CA. We have a separate optional earthquake insurance that is maintained by some CA authority that is pretty expensive to buy into. Wonder why that can't be done with fires that originate from a forest if it's such a high risk?
Something similar could be done for forest fires but hasn’t been setup yet.
The general consensus is CEA policies are underfunded and the expectations are that the feds will step in.
I live in CA. We have a separate optional earthquake insurance that is maintained by some CA authority that is pretty expensive to buy into. Wonder why that can't be done with fires that originate from a forest if it's such a high risk?
Edit: I would guarantee that the state run plan is both underfunded and not charging appropriate premiums for the given risk.