State Farm Discontinuing 72,000 Home Policies In California In Latest Blow To State Insurance Market

[1srelluc]

State Farm discontinuing 72,000 home policies in California in latest blow to state insurance market

hosted.ap.org

SACRAMENTO, Calif. (AP) — 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company, California's largest insurer, cited soaring costs, the increasing risk of catastrophes like wildfires and outdated regulations as reasons it won’t renew the policies on 30,000 houses and 42,000 apartments, the Bay Area News Group reported Thursday.

“This decision was not made lightly and only after careful analysis of State Farm General’s financial health, which continues to be impacted by inflation, catastrophe exposure, reinsurance costs, and the limitations of working within decades-old insurance regulations,” the company said in a statement Wednesday.

“State Farm General takes seriously our responsibility to maintain adequate claims-paying capacity for our customers and to comply with applicable financial solvency laws,” it continued. “It is necessary to take these actions now.”



My guess is that California has regulations which prevent insurance companies from being able to charge rates which would allow them to make a profit or even break even.

I'd rather them pull out than to increase everyone else's insurance who live in low risk areas of the country.

Never fear though. California will either threaten the insurers to stay and force them to cost shift by raising the rates of the insured who live in other states or, if they can't do that then the California state government will set up underpriced insurance, go bankrupt and then get a bailout from Uncle Sugar in Washington.

FL is in deep trouble too in that regard.......There is a reason people used to have fish camp shacks and small cheap 750 sq ft houses on a slab in southern coastal areas. Just clear off the slab and build another.

Back then no sane person would have written a policy on a million dollar beach house that might get razed by a hurricane every 20 years or so. The insurer should be charging $50k a year just to break even without a huge risk pool in less risk prone areas to dilute the risk.

 

[debbiedowner]

State Farm discontinuing 72,000 home policies in California in latest blow to state insurance market

hosted.ap.org

SACRAMENTO, Calif. (AP) — 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.

“This decision was not made lightly and only after careful analysis of State Farm General’s financial health, which continues to be impacted by inflation, catastrophe exposure, reinsurance costs, and the limitations of working within decades-old insurance regulations,” the company said in a statement Wednesday.

“State Farm General takes seriously our responsibility to maintain adequate claims-paying capacity for our customers and to comply with applicable financial solvency laws,” it continued. “It is necessary to take these actions now.”



My guess is that California has regulations which prevent insurance companies from being able to charge rates which would allow them to make a profit or even break even.

I'd rather them pull out than to increase everyone else's insurance who live in low risk areas of the country.

Never fear though. California will either threaten the insurers to stay and force them to cost shift by raising the rates of the insured who live in other states or, if they can't do that then the California state government will set up underpriced insurance, go bankrupt and then get a bailout from Uncle Sugar in Washington.

FL is in deep trouble too in that regard.......There is a reason people used to have fish camp shacks and small cheap50 sq ft houses on a slab in southern coastal areas. Just clear off the slab and build another.

Back then no sane person would have written a policy on a million dollar beach house that might get razed by a hurricane every 20 years or so. The insurer should be charging $50k a year just to break even without a huge risk pool in less risk prone areas to dilute the risk.

State Farm started dropping policies and raising the rates quite a bit the year after hurricane Ivan in 2004 and then in 2009 they pulled completely out.

State Farm leaving Florida property insurance market

TALLAHASSEE - Little more than two weeks after state regulators turned down its request for a 47.1 percent rate hike, State Farm announced Tuesday it would stop offering property insurance in Florida…

www.jacksonville.com

 

[DGS49]

Well, there is a solution, and it's a wonder that the State legislature hasn't at least put it on the table.

The State government must "backstop" homeowner's insurance in the state. Place a limit of the maximum exposure of the insurance companies, and the State will cover losses over the max. Set the cap in dollars per square foot, so everyone knows what their exposure is.

They subsidize everyone else in the State; why not subsidize home owners and renters?

I'm not saying it would be simple, but the solution is easy.

NOTE: Florida needs to do the same thing.

 

[Moonglow]

State Farm discontinuing 72,000 home policies in California in latest blow to state insurance market

hosted.ap.org

SACRAMENTO, Calif. (AP) — 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.

“This decision was not made lightly and only after careful analysis of State Farm General’s financial health, which continues to be impacted by inflation, catastrophe exposure, reinsurance costs, and the limitations of working within decades-old insurance regulations,” the company said in a statement Wednesday.

“State Farm General takes seriously our responsibility to maintain adequate claims-paying capacity for our customers and to comply with applicable financial solvency laws,” it continued. “It is necessary to take these actions now.”



My guess is that California has regulations which prevent insurance companies from being able to charge rates which would allow them to make a profit or even break even.

I'd rather them pull out than to increase everyone else's insurance who live in low risk areas of the country.

Never fear though. California will either threaten the insurers to stay and force them to cost shift by raising the rates of the insured who live in other states or, if they can't do that then the California state government will set up underpriced insurance, go bankrupt and then get a bailout from Uncle Sugar in Washington.

FL is in deep trouble too in that regard.......There is a reason people used to have fish camp shacks and small cheap 750 sq ft houses on a slab in southern coastal areas. Just clear off the slab and build another.

Back then no sane person would have written a policy on a million dollar beach house that might get razed by a hurricane every 20 years or so. The insurer should be charging $50k a year just to break even without a huge risk pool in less risk prone areas to dilute the risk.

The US government and the taxpayers will cover them, duh., don't you just love capitalist? Insurance companies are the largest cash holding companies in the US.

 

[debbiedowner]

I have my auto insurance with SF here in Florida and it has gone up 100% in a little over a year. Haven't had a ticket or accident since 1966.

 

[Oddball]

I have my auto insurance with SF here in Florida and it has gone up 100% in a little over a year. Haven't had a ticket or accident since 1966.

What has been the increase of "uninsured drivers" nationwide?

 

[debbiedowner]

What has been the increase of "uninsured drivers" nationwide?

Have no idea but probably high in Florida. That is something I'm working on and deductibles to lower my rates. If an uninsured motorists hits me after my company covers the medical I have health insurance that will pick up when exhausted.

 

[Moonglow]

What has been the increase of "uninsured drivers" nationwide?

I doubt it was 100%

 

[debbiedowner]

I doubt it was 100%

No, but I had high coverages and now I am lowering them, raising my deductible on comp and collision, lowered the mileage I drive annually and took the online driving course 2 days ago, waiting to here how all this lowered my rates.

 

[EvilCat Breath]

Farmers is also out in California as is All-State Allstate Stops Selling Homeowners Insurance In California. Here’s What Residents Can Do

Insurance doesn't like a failed state.

 

[Oddball]

Have no idea but probably high in Florida. That is something I'm working on and deductibles to lower my rates. If an uninsured motorists hits me after my company covers the medical I have health insurance that will pick up when exhausted.

Riiiight....So all those illegal indigents driving without insurance has jacked your rates.

What do you think about open borders now?

 

[Oddball]

State Farm discontinuing 72,000 home policies in California in latest blow to state insurance market

hosted.ap.org

SACRAMENTO, Calif. (AP) — 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.

“This decision was not made lightly and only after careful analysis of State Farm General’s financial health, which continues to be impacted by inflation, catastrophe exposure, reinsurance costs, and the limitations of working within decades-old insurance regulations,” the company said in a statement Wednesday.

“State Farm General takes seriously our responsibility to maintain adequate claims-paying capacity for our customers and to comply with applicable financial solvency laws,” it continued. “It is necessary to take these actions now.”



My guess is that California has regulations which prevent insurance companies from being able to charge rates which would allow them to make a profit or even break even.

I'd rather them pull out than to increase everyone else's insurance who live in low risk areas of the country.

Never fear though. California will either threaten the insurers to stay and force them to cost shift by raising the rates of the insured who live in other states or, if they can't do that then the California state government will set up underpriced insurance, go bankrupt and then get a bailout from Uncle Sugar in Washington.

FL is in deep trouble too in that regard.......There is a reason people used to have fish camp shacks and small cheap 750 sq ft houses on a slab in southern coastal areas. Just clear off the slab and build another.

Back then no sane person would have written a policy on a million dollar beach house that might get razed by a hurricane every 20 years or so. The insurer should be charging $50k a year just to break even without a huge risk pool in less risk prone areas to dilute the risk.

Secura stopped selling and renewing in Wisconsin and Minnesota....There's something far deeper afoot.

 

[1srelluc]

Riiiight....So all those illegal indigents driving without insurance has jacked your rates.

What do you think about open borders now?

Yep, the state should not issue a registration without insurance but I suspect many states have some version of Virginia's $500.00 uninsured motorist fee that drives costs up for insured folks.

Thank goodness it dies in Virginia come July 1, 2024.

As of July 1, 2024, the uninsured motor vehicle fee in Virginia has been eliminated. Previously, drivers could register their vehicles without purchasing car insurance by paying an annual $500 uninsured motor vehicle fee.

The revenue from these fees went into Virginia’s Uninsured Motorist Fund, which aimed to assist insurance companies in covering claims related to uninsured motorists.

However, this fee is no longer an option, and all motorists in Virginia must now carry auto insurance that meets or exceeds the state’s liability insurance requirements.

If you previously paid the UMV fee, you are now required to obtain vehicle insurance that complies with Virginia’s liability insurance standards. This change ensures that all drivers have proper coverage and reduces the risk associated with uninsured motorists on the roads.

 

[Jarlaxle]

Well, there is a solution, and it's a wonder that the State legislature hasn't at least put it on the table.

The State government must "backstop" homeowner's insurance in the state. Place a limit of the maximum exposure of the insurance companies, and the State will cover losses over the max. Set the cap in dollars per square foot, so everyone knows what their exposure is.

They subsidize everyone else in the State; why not subsidize home owners and renters?

I'm not saying it would be simple, but the solution is easy.

NOTE: Florida needs to do the same thing.

Thats the OPPOSITE of what needs to happen.