Largest home insurer in the country no longer offering policies in California (August: health insurance, mortgage)

[Ruth4Truth]

Originally Posted by bpollen

This is tough on curent homeowners there. They can't even sell their homes, if they're not insurable. Horrible situation. And people should not be buying homes there for the first time, unless they can do without good homeowner's insurance. It's an overly hazardous area, where you have to live at your own risk. The same is true for some of the Gulf of Mexico high-hurricane-risk areas.

Things have changed. The climate has changed. Risks have changed. The shores are eroding. People need to stop moving into high-risk areas, and those who are there need to leave, when they can. It's going to get worse.

Yet developers are still building luxury developments on bays around FL and the Carolinas. Even in Seattle, people are paying top dollar for lots on Puget Sound or Elliott Bay with views of downtown. The California town of Capitola, on Monterey Bay, allowed developers to build homes right on the beach, barely above the high tide line! Guess what happened to them in the last storm season? I don't know why any insurance company would have insured them in the first place.

[Tulemutt]

In related news, here’s how it goes with the insurance world:
Florida’s homeowner insurance rates are four times the national average. That’s not getting better anytime soon
https://www.cnn.com/2023/06/01/busin...tes/index.html

[JGC97]

^^ Tulemutt. Other states are seeing the same thing as Florida now. Their rates are skyrocketing. Due to Prop 103, we don't have that happening here. The consequences of that are that companies will not write new policies. It should be stated that these companies will continue to insure clients who already have a policy with them. They just won't be writing any new policies for resale purchases or new construction.

[NORTY FLATZ]

Looks like some might look into "self insure" possibilities. Ofc, some criteria must be met...

[nuggznsauce]

Originally Posted by HereOnMars

^^ Tulemutt. Other states are seeing the same thing as Florida now. Their rates are skyrocketing. Due to Prop 103, we don't have that happening here. The consequences of that are that companies will not write new policies. It should be stated that these companies will continue to insure clients who already have a policy with them. They just won't be writing any new policies for resale purchases or new construction.

And Florida and Louisiana are also seeing an exodus of insurance companies as well. This will continue in any area that continues to get brutalized by increasing natural disasters that destroy more home year after year. They can only raise rates so much and eventually it'll drive customers that don't make claims to other insurers that stick to lower risk areas.

Insurance companies don't make money helping people rebuild year after year. And if you choose to keep living in a place that will have guaranteed storms or wildfires then it's time to reevaluate and prioritize the clients that don't live in high risk areas. Better to cut off those that already cost too much to cover versus lose the thousands that will move to more affordable insurance companies.

[JGC97]

Originally Posted by nuggznsauce

And Florida and Louisiana are also seeing an exodus of insurance companies as well. This will continue in any area that continues to get brutalized by increasing natural disasters that destroy more home year after year. They can only raise rates so much and eventually it'll drive customers that don't make claims to other insurers that stick to lower risk areas.

Insurance companies don't make money helping people rebuild year after year. And if you choose to keep living in a place that will have guaranteed storms or wildfires then it's time to reevaluate and prioritize the clients that don't live in high risk areas. Better to cut off those that already cost too much to cover versus lose the thousands that will move to more affordable insurance companies.

Very true. They aren't in the business to lose money so it makes sense.

Home builders and even those who have to re-build after a fire are starting to use new innovative products that are fire resistant. I recall seeing a story about the fire in Paradise. A home made of brick seemed to be safe but it caught fire anyway because the eaves under roof were made of wood and that's what caught fire then went into the attic. These new products they're making are supposed to prevent that. They're still pretty costly but I think that's something that needs to happen, if we're going to continue to see these devastating events occur.

With all the rain and snow we got this past winter, I don't know if it was enough to add moisture to the tree roots. Dry trees from the multiple years of drought turned the state into a tinder box. They look somewhat healthy to the naked eye but beneath the bark, it's a different story. I don't know what this summer will be like. Not a season I'm looking forward to.

[2sleepy]

Phooey on State Farm, if you need homeowners insurance in California call Hippo. We paid $950 last year after paying $1800 to USAA the year before. We had a $13,000 claim this winter and our rates didn't go up this year. Someone told me that they can't raise rates if it was an 'act of God' but I don't know what they consider an act of God, in our case a winter storm caused a tree to fall on our house.

[JGC97]

^^ Thank you for that suggestion. I will do that. I'm pretty fed up with my insurance company. I've never put in a claim with my own insurance. Ever. Had to do it on the neighbor's insurance when her dead tree fell on my home in 2021. No problems with it except I made the mistake of calling my insurance to let them know of the incident. You know. FYI. Should have kept my damned mouth shut. Now, I'm getting letters asking for proof I had the repairs done. I think they're looking for a way to cancel me. Or maybe I'm just paranoid. I'll be looking into Hippo. I just hope they aren't like other companies that entice you with a promise of low rates and then, once they have you, start increasing premiums. My health insurance did that. Three increases in 24 months. Phooey on that!

Thanks

[CA4Now]

Originally Posted by HereOnMars

Here's the real reason SF is leaving . . .

It all has to do with Proposition 103, a Measure that was passed in 1988 where insurance companies are prohibited from raising rates without prior approval from the state. This Proposition passed with a 51% majority from voters.

https://www.insurance.ca.gov/01-cons...venor/info.cfm

Apparently, according to the author of Prop 103, "insurance companies can’t just stop selling insurance to consumers in order to make more money for themselves – they have to open their books and get the Insurance Commissioner’s approval. Commissioner Lara has the power to order State Farm to obey the law and reverse its decision."

https://www.insurancejournal.com/blo.../31/723136.htm

[JGC97]

Originally Posted by CA4Now

Apparently, according to the author of Prop 103, "insurance companies can’t just stop selling insurance to consumers in order to make more money for themselves – they have to open their books and get the Insurance Commissioner’s approval. Commissioner Lara has the power to order State Farm to obey the law and reverse its decision."

https://www.insurancejournal.com/blo.../31/723136.htm

Interesting. I wonder if SF and others who might decide to do the same will be stopped by the state from doing it. Sort of puts them between a rock and hard spot. True, they've lost a lot of money in recent years with the enormous payouts from wildfire devastation but can't raise rates to re-coup their losses.

Not a position I'd want to be in. This will be fun (in an evil kind of way) to watch.