State Farm discontinuing 72,000 home policies in California in latest blow to state insurance market
State Farm discontinuing 72,000 home policies in California in latest blow to state insurance market
Insurance giant State Farm says it will discontinue coverage for 72,000 houses and apartments in California starting this summer.
State Farm will discontinue coverage for 72,000 houses and apartments in California starting this summer, the insurance giant said this week, nine months after announcing it would not issue new home policies in the state
The Illinois-based company, California’s largest insurer, cited soaring costs, the increasing risk of catastrophes like wildfires and outdated regulations as reasons it won’t renew the policies on 30,000 houses and 42,000 apartments, the Bay Area News Group reported Thursday.
And like a bad neighbor, State Farm won't care.
No insurance companies care. They are all in business to make money. I can’t blame them for not wanting to insure a disaster-prone area.
Hahaha I heard the jingle as I read it! Perfection!
All insurance types should be nationalized.
I agree, however I also agree that you should not expect to be able to build in an area that is prone to disaster. Like if I build my house on a Sandy Beach and the foundation fails because it's on Sand I'm not going to expect that the insurance company is going to cover it. The same should be considered for areas that are prone to natural disasters like California or Florida with Hurricanes
The oil industry will keep making money and we're going to pick up the check in the form of insurance, taxes, and misery.
It’s true, these are externalized costs.
Socialize the costs, privatize the profits
What climate catastrophe-free area of the country does State Farm think it will make sense to still insure homes in?
Also, I thought they were like a good neighbor.
“Like a good neighbor, State Farm is there” means that they resemble a good neighbor only insofar as both share the attribute of existence.
At least Geico is relatively honest. "Yes, we are a bunch of reptiles."
Non-coastal new England is pretty safe. No earthquakes, few hurricane effects, almost no tornadoes, tends to stay damp enough and has enough old deciduous growth, where forest fires aren't a big issue.
I am sure there are other places that are low risk as well.
Part of the problem is that many of the states where insurance companies are leaving have rules that limit what they can charge. That sounds good in principle, but with climate change causing these disasters to happen more often the insurance companies are bleeding money. Ultimately insurance as an industry can't work if you keep having losses, and if you can't increase prices to cope then you have no choice but to withdraw.
I've sure State Farm is happy to cover catastrophe-prone areas, but only if they won't lose money on average.
Being forced to have home insurance is ridiculous. Private companies jack up prices, make all the rules, and come and go as they please. We need to figure out a better system!
The only one forcing people to have homeowners insurance is mortgage companies, that want to ensure the collateral on that mortgage doesn’t disappear.
That and common sense, as even if you don’t have a mortgage, you also don’t want a disaster to make your largest asset go poof.
There is competition. That is meant to keep prices lower. But insuring people in disaster prone areas just isn’t a wise business decision.
Not (re)building in areas prone to wildfires, mudslides, floods, and the like would be a good start. Otherwise, someone has to pay to rebuild when the ever more frequent disaster hits. State farm and other insurers suck in many ways, but this isn't unreasonable on their part.
Who is forced to have home insurance?
If you can afford a Californian mortgage, you can afford to leave the state and buy your house outright.
But some people think they're "too good" for that, while they complain about not being able to afford where they currently are.
"just upend your entire life and everything you've worked for to move to some hellhole flatland state that mainly exists for late night TV jokes to be made about it, where everyone will hate you for your previous life you were forced to give up, because these same cornfed fuckwads want to live in the 1700s, and say you have to join them or they'll burn crosses on your lawn"
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This further pushes up the costs of homeownership.
There are some places you really should just not be building houses.
It's not about that. That's the insurance industry's cover story.
The real story is insurance companies giving a hissy fit about being subject to regulation by the state's insurance commissioner.
If the insurance industry was only dropping coverage in the middle of forests, or on beachfront or riverfront property, that would make sense. But it's not. They're dropping coverage on infill development in the middle of cities.
So much of this could be fixed by forcing electric companies to update their infrastructure and force them to bury power lines.
Or they should force the power company to pay the full cost of every home damaged by their outdated power lines triggering fires.
It's not that simple. Yes, power lines do start a lot of fires, but climate change induced drought is the main cause of the scale and frequency of wildfires in California. If the conditions are right it's only a matter of time until something sets it off.
Like a good neighbor state farm don't care 🎵
Wouldn't it be a great idea not to build in places that don't burn down, get flooded, or blown away on a regular base? Because that is the main reason that those houses cannot be insured anymore.
Most california wildfires are caused by decaying power lines because PG&E decided they would rather buy their own stock than fix their infrastructure.
And global climate change is turning more and more of the country into disaster prone areas. You really think the answer is everyone should just move? Explain the logistics of that.
If, like with PG&E, they would actually extract all the money from the culprits, insurances would come out fine in the end. As they don't, this boils down to an accepted risk to live in that place.
And: there is more need to build a house in the middle of a dry forest known to burn easily. Yes, people want to live right in the nature, but sometimes having a safety gap is the smarter choice.
Good, we shouldn't be paying for people to build houses under water and in wildfire zones.
Louisiana has entered the chat