State Farm & Allstate won’t write new home policies in California

Last night BF and I were discussing homeowners premiums in CA & FL. I made an offhand comment that if the calc’d premium on a house was $150,000 a year and the state insurance department was only allowing the insurer to charge $100,000 then there’s a perverse incentive to rebuild.

BF’s eyes widened. “I’m sorry; did you say $150,000 a year for homeowner’s insurance?”

Yeah, if it’s a million dollar house with $250,000 of contents and you can reasonably expect a total loss every 10 years, and you add in the insurer’s overhead then… yeah.

He paused and considered that and appeared to accept it, but that clearly blew his mind initially.

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IFYP

I know that most insurers are cutting their exposures back as the result of not being able to collect enough premium to cover current losses + ALAE (let alone any overhead).

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Many view insurance prices should be subject to “affordability considerations” above a company making any sort of profit.

Well it has to be affordable for the insurer too! (Yes, I know that is an incomprehensible subject to most, but I think my BF is considerably smarter than your average dumb American in that regard.)

I really struggle with this in a full throttle capitalist market like USA. Insurers don’t have separate affordable grocery or car markets so this just acts to the disadvantage of insurers.

Looking at how dense the foliage was in the first photo and with no fire break between the town and the surrounding hills, I’m surprised it didn’t get wiped out by a fire years ago.

This seems way too frequent. You won’t typically get fires in the same area that soon after a burn.

Depends on how completely the area burns. Also, dry grass burns really well.

What always boggles my mind is the picture of the burnt out house next to a tree that still has needles on it.

What’s weirder is walking through neighbourhoods where some houses burned and others didn’t.

Sure, but how does a house burn down, get rebuilt, then burn down again within 10 years? I’m guessing almost never.

Nationwide, I agree with you. In a few fire prone areas, I would not be surprised.

My mom and several relatives probably get evacuation alerts due to wildfires 2-3 times per decade, perhaps more often. I would not be surprised if there are a few houses in the region that are burning down every decade or so.

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Pretty sure that happened in Paradise CA.

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Maybe there shouldn’t be houses there?

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But the views are spectacular…

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If it didn’t happen this year, next year would be worse.
Brush needs to be cleared, controlled burns have to happen, etc. But no one wants to be downwind of a controlled burn.

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The WSJ reminds readers that there is an alternative to regulated homeowners insurance: Surplus lines is a thing.

(Gift Link:) https://www.wsj.com/finance/wildfire-insurance-homeowners-costs-3889531f?st=BuAuk2&reflink=desktopwebshare_permalink

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How’s your solvency looking now, Mr. Wood?

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…but you can’t raise rates & you’re a bunch of meanies for non-renewing your policies.

Okay, Mr. Soller, maybe you can get the federal govt to bail you out then. Oh, wait…

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We probably need a thread specifically for the fires in California, like we’ve had for the ones in Hawaii and Colorado, because … I have a question.

Am I the only person who sees the appeals for donations to go to The Red Cross and thinks fuck them, no way am I sending money to it, they’ll keep a shitload of it for “internal operations” and salary padding and most of the rest of it will disappear?

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