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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

#41

Post by everybodyknows »

infecto wrote: post #30
theogravity wrote: post #24

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?

Because state run insurance is kind of a crock. These are programs put together for constituents to be pleased enough to vote in the next election cycle but will do little to help in an actual disaster. Its been years but the state run insurance had pretty limiting caps on both contents and the cost to rebuild. Seemed kind of pointless from a total loss perspective. Edit: I would guarantee that the state run plan is…

> underfunded and not charging appropriate premiums

Sure. But Sacramento has a secret disaster recovery plan: Appeal to Washington for a bailout.

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

#42

Post by redserk »

infecto wrote: post #30
theogravity wrote: post #24

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?

Because state run insurance is kind of a crock. These are programs put together for constituents to be pleased enough to vote in the next election cycle but will do little to help in an actual disaster. Its been years but the state run insurance had pretty limiting caps on both contents and the cost to rebuild. Seemed kind of pointless from a total loss perspective. Edit: I would guarantee that the state run plan is…

Genuinely curious, how so? Do they have frustrating claims processes or limit pay-out when an incident happens?

I'm in another state and my home insurance has been increasing but nowhere near what it sounds like is happening in California and Florida.

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

#43

Post by ftufek »

It's not just the home insurance either. Last week, I bought a car and 3 of the big insurance companies refused to insure it without a 15 days waiting/underwriting period (Geico which I've had for many years, State Farm and Progressive). It was pretty surprising, it seems like they are trying to stop offering insurance without explicitly getting out of the state or something. Thankfully, AAA gave immediate coverage.

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

#44

Post by cqqxo4zV46cp »

tehlike wrote: post #38
DoreenMichele wrote: post #23

Earlier quoted context omitted.

It's probably a lot more complicated than that. For one thing, California is a place that imported eucalyptus. This is a fire hazard. https://news.ycombinator.com/item?id=37442671

If eucalyptus is now fact of the state, what needs to be done to reduce its impact?

California could look to, I don’t know. Australia!? Instead of Americans again pretending that any problem they face is uniquely theirs.

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

#45

Post by etrautmann »

tehlike wrote: post #20
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.

That’s one piece of a larger picture, which includes climate change, snowpack, severe weather events, PG&E, etc.

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

#46

Post by [deleted] »

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.

[deleted]

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

#47

Post by underseacables »

The FAIR plans are NOT fair. The insurance companies in the FAIR association have zero incentive to reduce rates, or even assist with mitigation recommendations. AB38 was supposed to fix this and force the insurance companies to recognize mitigation, but it is so overly broad, and watered down, that it means nothing.

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

#48

Post by underseacables »

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...

Lara could make radical changes if he wanted to, but ever since the court sided with him twice against the FAIR association, the insurance companies have sort of gone to war against him.

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

#49

Post by rufus_foreman »

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.

>> My understanding is fires are getting worse on the west coast thanks to climate change

So, without taking a position on whether fires are getting worse, how would that matter for the insurance markets?

There's a price that would make it work. Risks are higher, price of an insurance policy would be higher.

Insurance companies, left to their own devices, wouldn't leave markets due to that, insurance companies would price risks accordingly, which is the thing that insurance companies do. That's the positive externality of insurance companies, they give you information about risk.

Insurance companies leave markets when they aren't allowed to accurately price risk, which the state of California will not allow them to do.

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

#50

Post by DoreenMichele »

rufus_foreman wrote: post #49
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.

>> My understanding is fires are getting worse on the west coast thanks to climate change So, without taking a position on whether fires are getting worse, how would that matter for the insurance markets? There's a price that would make it work. Risks are higher, price of an insurance policy would be higher. Insurance companies, left to their own devices, wouldn't leave markets due to that, insurance companies would…

So, without taking a position on whether fires are getting worse, how would that matter for the insurance markets?

I'm not arguing with you nor rebutting your claim. I haven't studied the situation in California and have no opinion about what is going on there.

But I did work in insurance for a few years and insurance began as a form of betting or gambling. If the possibility of X happening is too high, it's no longer a gamble.

So as the odds of being required to payout approaches 100 percent, they stop covering it because that's not what they do.

This is why flood insurance in the US is provided by the federal government, not private insurers: Because most land with residential development floods. It's not a question of if but when, how often and how badly.

Hurricane Andrew also significantly impacted the homeowners insurance industry. I don't recall the details at the moment, but this is not without precedent.

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