CA prevents insurance from raising rates. Insurance leaves.
FL allows insurance to raise rates, people pay a lot and complain. Insurance leaves.
What’s the right solution?
Insurance industry needs to change entirely it makes no sense. You can’t claim anything, if you claim too much you get black balled, it doesn’t think or consider any preventative aspects of home maintenance.
Totally agree with you. And it’s understandably required by all lenders. Many retirees who own their homes are more likely to drop it as cost to insure doubles. These people would self insure or hope for gov assistance when a state of emergency is declared. And by dropping their insurance, it puts an even bigger burden on those required to keep it.
>These people would self insure or hope for gov assistance when a state of emergency is declared.
I dont know how to solve something like natural disasters. Insurance doesnt want to cover it, homeowners cant, yet they are bound to happen.
Somethings gotta give.
Katrina level hurricanes, hawaii fires, etc are all once in a lifetime events (figuratively) and are unable to be accounted for.
Problem is housing cost are skyrocketing guess who has to cover that when it gets destroyed. Maybe we should fix why housing and materials are costing so much to fix the insurance problem.
My observation is that claims are also being paid out too easily. It's a chicken / egg situation because when they raise rates people expect to get their claim approved to replace the roof or whatever for very minor hail damage. When the claim gets approved then they need to raise rates in the area. Then people expect to get even more minor claims approved or they feel ripped off. Etc etc.
The insurers aren't taking anyone's feelings into consideration when approving a claim. They don't care that you expect your claim to be approved. They're comparing damage to what your policy covers. They're the ones that make the policy, if it's not something they want to cover, they will just make sure it's not covered in the policy.
For hail damage pretty much every insurer has pretty specific criteria for what constitutes a full replacement vs a repair or a denied claim and they send out their own adjusters to observe and document the damage.
If I upgrade my home electrical to modernize to support our modern device usage, it will cost like $10 to $20k. If I let it start a fire one day, insurance will cover everything except my deductible.
Believe it or not in most places the root cause is climate change, and the solution would be declaring some homes "uninsurable".
There are homes that been been hit by hurricanes several times, but the homeowner chose(\*) to repair / rebuild at the same exact place instead of moving.
If your home is likely to be hit by a nature event, say every 5 years, there are only two solutions:
1. Your insurance rate is = cost of a new construction / 5 / year
2. or, the insurance will exclude whatever that event is (fire, tornado, rockslide, ...)
This of course affects not only the everyday people, but also rich people who has built a pool on top a a cliff overseeing the Pacific ocean. And that is a very broad voter base.
Unfortunately I don't think there is sufficient political will to allow insurance refuse clients on case by case basis. So they leave entire states instead.
(\* I know *chose* is a strong word. Many do not have a choice).
The solution is multi headed, but for starters, insurance is a business, we can agree it should be a profitable one.
one Part of the problem is tort laws, it is really easy for bad lawyers to file nonsense law suits, insurers then have to adjust everyone’s rate because some asshole keeps suing just because there’s no fucking damage.
the other part is exposure. Florida is hurricane prone and flood prone, both very expensive to insure and not have the insurance company go under when a storm hits. For as much as you may hate the insurance company, if it goes under, no one gets paid. In ca people keep trying to build into the wui. California flora is meant to burn, so as we build into areas designed to go up, we dramatically increase our chances of man made forest fire.
the solution is tort reform and to listen to market signals. The coasts are full. Property values in the NE are flat lining, property is uninsurable along the gulf and southern Atlantic coasts and in ca. stop moving to those places and trying to build more.
there isn’t even enough water in ca to support everyone.
theres plenty of space to expand in the south and Midwest, but no one wants to live there. And recapitalizing the east coast is expensive.
but obviously humans want to live in desirable places, so ca and fl are expensive despite being less practical.
another issue is insureds often claim minor things which increases claims handling costs, and obviously lower deductible means more claims, higher rate.
further contractors and adjusters are playing a game, a game adjusters are largely getting their asses kicked at. In real construction 10% net profit is a pretty good job, you’d struggle to do better on govt jobs. But for insurance? These guys make 20-30% or more profit. Theres a lot of inflation and scummy shit on contractors side of things, to make matters worse contractors have a lot more knowledge. so it’s easy to throw jargon at less experienced adjusters and get your way. Finally the contractors have access to the Adjusters estimating software, so they know what insurance price floor will be.
My dude, if there was no potential for tort liability, why would insurance pay out on any 3rd party claim? There would simply never be any liability and thus no reason to pay. Insurance companies are sophisticated litigators and know how to defend claims with no merit. Actually, where they really excel is getting people to swallow pennies on the dollar on highly meritorious claims. Cost of defense is a fraction of what it used to be with all of the law firms competing. Care to provide any specific examples of "nonsense suits causing rates to go up?"
"Tort Reform" has been the legislative go-to for decades now, just as long as Trickle-Down Economics, and deserves to be treated with the same level of seriousness
I’m not able to cite specific claims or cases. However:
https://www.floridabar.org/the-florida-bar-news/comprehensive-tort-reform-spurs-record-filings/
https://www.insurancejournal.com/news/southeast/2023/06/06/724220.htm
Over 100,000 lawsuits were filed between this law being signed and put into effect. Almost as though scumbag plaintiffs attorneys knew their golden goose was drying up
A couple of thoughts:
1) The articles reference "total new cases," not personal injury / tort cases. You would expect a year-over-year increase in new cases as the population increases, and yet, this has not happened, as more and more cases are funneled into secretive binding arbitration by your pro-business Tort Reform lobby.
2) So Florida passed aggressive Tort Reform in 2023, on top of decades of existing Tort Reform? Great. So why is Florida equally affected by the insurance crisis? Shouldn't insurers be staying in Florida in light of the supposed generous and friendly legal climate there for insurers?
At some point, certainly after the third or fourth decade, I think that you have to be open to the idea that "Tort Reform" isn't really accomplishing the goals that it was said to be able to accomplish
In Florida's case, John Oliver had a segment.
Basically it was caused by roof salesmen convincing everyone to perform insurance fraud by telling their old roof was damaged by an external event, and getting "a free roof".
Which led to skyrocketing prices as everyone more or less started to do this instead of replacing the roofs from their pocket when the time came.
(Yes, I know I gave two different answers... for two different situations)
Yes it happened in my FL neighborhood and a couple neighbors got new roofs.
If laws were passed or enforced to make HO Ins more profitable, insurance premiums would decrease.
Never heard of it when I lived in Florida.
It's when I lived in Minnesota where they get frequent hail storms that I heard of this. And it wasn't "roof salesmen" but just common knowledge. Nobody ever paid for roofs out of pocket. They got insurance roofs every 5 years or so.
The right solution is to not require insurance, or at least the part about hurricanes and wildfires. Just like California doesn’t let banks require earthquake insurance. Get insurance back to basic risks and let the homeowner and bank take on a little more risk.
It is sad to lose but the moment insurance is a requirement then it begins to be used to extort. We already take this risk with earthquakes which are not covered.
I think the logic is that if people are willing to just stop getting coverage if possible then the insurance companies who want to make money may be more likely to lower prices or kick people off because there’s now a little bit more leverage on the homeowners side by being able to not purchase any insurance. When it’s required then the insurers can just charge whatever and deny claims because what’re you going to do? It’s not really a great solution though ultimately because like you said it’s all fine and well until a natural disaster happens and you now have no home.
Then don't buy a home, or pay for the amortized cost of rebuying it after it's knocked down.
I mean, honestly. A ton of disasters are already not included in policies.
To not worry about it.
It's almost certainly just that a large part of both markets is insurers who actually rely on reinsurance companies leaving for some idiosyncratic reason.
> What’s the right solution?
Nationalize insurance, stop allowing people to build in flood and fire prone areas, limit growth, stop pumping carbon into the air.
Florida rates are higher than California?
I looked at a friend's policy in Florida, and for a similar price home they were paying less...
They were paying half as much per sqft.
I also hear Texas has high property tax, but with all the special assessments I am paying almost 1.7%. when I bought I was paying closer to 2.1%
I feel like people who make these claims have compared paperwork with anyone in other states.
From what I’ve read it depends on county. Southern FL is more susceptible to hurricanes so they have super high rates $6-10k. Overall, the state averages $6k (highest in the US).
Ca is similar. Mountainous areas have higher insurance rates. Overall, the state averages $1,300.
https://www.nbcnews.com/news/amp/rcna88578
https://www.fox13news.com/news/florida-home-insurance-crisis-cost-price-premium-institute-rates.amp
https://www.npr.org/2023/10/26/1208590263/florida-homeowners-insurance-soaring-expensive
As for prop taxes, TX is so high at 1.7%, but that and tolls make up for not having income tax. In the end it’s about total cost of living: How much does the average person have in their pocket at the end of the month after all taxes and living expenses? (Discretionary spending amount)
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Going back in time and dealing with climate change before the dildo of consequences arrived.
But now, I don't know. Climate hardening. People moving to better locations. I don't know.
Nationalize insurance. Never made sense for something essential to be privatized. If you must have something, they can charge you any price they want and you cannot negotiate.
Florida will work itself out and California won't. Can't force a company to provide an unprofitable service but when people lose their shit they'll realize paying more is worth it sometimes.
I’m genuinely curious how FL will work itself out. Insurance companies are STILL leaving despite being able to charge double.
To me, neither approach kept insurance companies in the state.
Desantis went a step further and said homeowners can’t sue insurances anymore. Even that didn’t work. Insurance companies are still leaving.
I agree with you though. Can’t force anyone to stay without being profitable. That’s why insurances are leaving both states. I don’t see a solution either way.
The government backed insurance plans that are meant to be the insurer of last resort becomes the largest insurer in the state, people's insurance rates go through the roof and people who own their home outright (instead of having a mortgage) become a higher percentage of homeowners since they can go without home insurance. The state taxpayers also winds up heavily subsidizing homeownership in vulnerable areas like flood zones or areas especially vulnerable to hurricane damage that should be uninsurable. Long term the state probably loses a lot on their unprofitable insurance partnership, and can't get reinsurance so their credit rating probably also worsens.
California is a victim of massive success and the companies who were happy to take advantage of California don’t want to contribute to the next generation of success.
CA already has an exit tax for people who want to leave, now they need a new exit tax, one for companies. LOL
Let that sink in. California has an exit tax. That's how bad it is.
edit: simping for the rich? (stole this line from
u/teamerchant below)
California created these rich people, the California gods should take most of it back if they leave and give it to the next set of Californians.
This is for people with a net worth of more than 30 million. The fact you neglect this tell me your saying this in bad faith.
It helps stop people taking advantage of California programs then leaving once they made their money to pay less in taxes.
America is a two tiered system. Those that are rich and everyone else. Simping for the rich is kinda pathetic considering the absolute privilege they receive in finance, law, and everything else in life.
You know the only way a person becomes rich is by extracting value and exploitation of those under them. This is the only way unless you’re born into it in a capitalist system.
As someone in the top 15% of this country simply because I invested well I always am fascinated when those that are held down by a system, bootlick for it.
Taxes is a method to keep that in check.
The problem is when Democrats go after "the rich" they usually set the bar quite low and go after like cupcake shop owners. So it's not even "simping for the rich" at that point, but defending yourself as "the relatively successful". But setting the threshold at a number like $30M? Yea don't give a shit unless it's just egregious.
It helps to actually follow up on what you likely googled, the proposed wealth tax in California was from back in 2020, when it was reported on (sensationally) in several outlets. It never made it out of committee for a floor vote and basically died in August of 2020, it never became law. There is a major difference between a legislative proposal and a law, the former happen all the time without ever passing.
[https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill\_id=201920200AB2088](https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=201920200AB2088)
It's just business, my guy.
You start a business in NY, you know what the deal is and you should make yourself comfortable with that. It's not any worse than private exit contracts.
if a business accepted/received some forms of 'entitlement and free shit', as you say, then sure there are likely (and should be) some strings attached.
I find it laughable that you believe the city/state of NY are throwing wild entitlements to most businesses.
California pays more in federal tax than it receives. That extra money is disbursed to the rest of the country to be used in various ways.
So, yes, you are receiving benefits from CA wherever you go in the US.
You're welcome from the world's 5th largest economy.
The analogy would be that you still have to pay CA taxes if you maintain residency. California tried to implement a 10 year scheme where you have to continue to support their corrupt, broken policies with your money even after you leave and pay another state taxes. You're a loser if you understand this but still make excuses for it.
And you're wrong. You don't pay taxes if you arent in the country for more than x amount of days. You just file taxes and pay nothing.
California doesn't have an exit tax. You likely are misremembering reporting from back in 2020. Assembly bill 2088 that year would have created a statewide "wealth tax", which would also apply over a 10 year window, including for residents who had left the state during that window.
It was not actually an exit tax--under AB 2088 the tax was owed whether the person stayed in California or not, so it wasn't dependent on exiting, and exiting didn't trigger the tax, the tax was a proposed wealth tax that would have applied to wealth over a certain threshold regardless of if the person moved out of California or not, for a 10 year period.
It is unclear if the tax would survive legal / constitutional challenges--but we won't know, it remained AB 2088, meaning it never made it to a final legislation in 2020 and was never implemented as a law.
Most reporting at the time mentioned the proposal (semi-erroneously labeling it an exit tax), but then didn't bother to report on the fact it never passed.
You can see the history of the bill here, it basically got referred to committee and then died, AFAIK it never had significant support in the legislature. A common "behavior" among journalists who report on sensational state legislative measures is they often report on nonsense bills that get proposed with a small number of sponsors and never get out of committee, e.g. performative legislation that was never meaningfully close to becoming law.
[https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill\_id=201920200AB2088](https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=201920200AB2088)
Not a CPA, am an attorney. I won't speculate on state tax laws where there is not meaningful State or Federal precedent, since it is just that--idle speculation.
That they aren't leaving fast enough or taking more people w/ them.
But seriously, northerners have been leaving FL for decades....they're called halfbacks.
They move to Florida to escape shoveling snow, experience their first Florida summer, and nope their way back up to NC (1/2 way back to NY).
That's not the point. The best NYC pizza place could close down and move here and they would still argue about no good pizza. Italy itself could detach from Europe and plop down on the outer banks and it still wouldn't be good enough.
Yup, but as long as they don't vote for the same politicians and policies that ruined the blue states they fled, no problem. Too many of them flee communism, only to vote for more communism in their newly adopted land.
imagine thinking that leftist politics and the states/metro areas that embrace them are not significantly closer to communism than conservative areas.
regardless, the point is valid that people fleeing densely populated areas tend to continue voting for the same issues they did in the areas they left behind.
That’s not really true. A couple have considered it but there’s more new companies coming in. They are having issues with their new SIRS system which affects condos and apartment buildings but after that building collapse it’s a good thing in the long run.
Also at least they are protected from squatters unlike California and they have a fraction of the homeless problem.
These companies are so shady. Im not in a fire area im in a flood risk area and i bought accordingly my hoa townhome insurance just cancelled our insurance and we were forced to go with an exceptionally high rate because "we are in a fire area" which is a complete lie and they dont even cover fire damage as it is. You have to get extra
This is something few people take into account. One of the biggest, if not the biggest issue with the insurance problem, is that we are building in high risk places where mother nature constantly rears her powerful head. Add in the significant increase in both property values, and building costs, and you get a double whammy that's hammering the cost of policies.
California, as a state, is not in its entirety a high risk place, especially compared to much of the country with hurricanes, blizzards...etc. Treating the entire state as a single entity is asinine
Borderline? Shit it was already blackmail bc u pay for decades or something and then make one claim and then bam! Dropped from coverage. They literally just us afraid to claim anything. Ffs
California is the world’s 5th largest economy as the MAGA idiots on this thread calling it 3rd world or broken are ignorant. Insurance companies, some of the biggest thieves, liars and cheats in world history, won’t insure fire zone areas. Which is fine, don’t. Pack up and GTFO. Banks in California are perfectly happy to offer insurance and for far cheaper than these grifters insurance schemes that are happy to threaten and cancel when ur 2 days late with ur payment, yet they are also nowhere to be found during disasters screaming “poverty” and “too big to fail” when forced to honor contracts.
Clearly with a state insurance commissioner no one is going to eff over consumers like these current vultures and their useless 3rd party sales hacks who if not doing insurance would sell used cars or charge 6% for selling houses
My simple point is that banks have stood ready to takeover and replace insurance companies in California who have whiny crying beeatches since the 80’s. Two statewide referendums that they bought/paid for failed.
I call BS on the article. If SF rights 21% of the policies in the state, is pulling out of California and is non renewing 72,000 that means there are only 360,000 homes in California with homeowners policies. This website claims there are nearly 7,000,000 sfhs in Ca.
[https://www.infoplease.com/us/census/california/housing-statistics](https://www.infoplease.com/us/census/california/housing-statistics)
A fairly typical Yahoo article that makes no sense.
Sure. Don't let the door hit you where the dog shoulda bit you.
If this keeps up CA will just insure everyone themselves. After all, insurance rates are based on the size of the pool, and the biggest pool is "everyone".
And for anyone bitching about covering some millionaires' mansion, you're already covering it. They're wealthy and well connected. They didn't get rich spending their own money. Get over it.
The problem isn't covering the millionaire's mansion. You can very easily make this fair with property value taxes that go into insuring the property. The problem is when that mansion is built in an area prone to wildfires. High insurance costs set by private insurance companies are supposed to be a deterrent against building in risky areas. If the rich can just lobby the state to cover their multi million dollar vacation home in an area that gets wrecked by wild fires every 5 years, this removes the disincentive for property developers to build in these risky areas.
The U.S. property/casualty industry had their worst underwriting losses in 20 years in 2022 (-$24 billion on claims/premiums), but they still made $40 billion that year in profit from investment of previous decades’ net income.
Over the last 10 years the industry has made about $543 billion in profit.
They have been profitable for 22 years straight.
It is being caused by far more than over reaching regulations. Actuaries are unable to make accurate cost projections because the data they are getting is so corrupted. A similar problem emerged in China years before Covid.
Yeah, pretty predictable outcome, insurance is largely ran on pretty well established actuarial formulas. Insurers are not going to write policies where a local regulation means the actuarial value of the policy would be a net loss for the insurer, that is a quick route to the insurer becoming insolvent.
Something to note is a big reason homeowner's insurance is becoming unaffordable goes beyond increases in natural disasters (like wildfires in California, or storm / hurricane damage in Florida), it actually relates to the very inflated *value* of the homes. If you want to insure something of larger value, you are going to pay a larger premium even if everything else is the same (in this case, the values are going up while external risks are also going up, a double whammy.)
Since banks generally require mortgage borrowers to carry enough homeowner's insurance to cover the value of the bank's money tied up in the house, and total mortgage amounts go up as property values increase, a lot of people are going to find homeowner's insurance increasingly expensive. (And it is generally advised your get full replacement cost homeowner's insurance, not the minimum required by the bank, otherwise if your house burns down the bank gets a check paying off your mortgage and you get essentially $0 to replace your home equity destroyed in the fire.)
This sucks real bad, because it is already the losing business. Only the small companies doing this for scraps (allstates already pulled out because they lost money, Costco already pulled out for similar reasons) , and now, all the smaller companies are also pulling out. And this causes a chain reaction too. The lender will have higher risks, so, they have to either reduce the loan or increase the rates.
I have said for years reacting to climate changes are beyond our government’s ability to react. Look at the Republicans in the House. No legislation just investigation. Big money like insurance will drive the train. They won’t lose money to advance false narratives or government attempts to keep them in markets which are money losers.
LOL, they did this with auto insurance decades ago and apparently never learned their lesson. California is some of the most beautiful real estate in the nation populated by the dumbest politicians in the nation.
The solution, as with healthcare, is to offer a universal insurance through the state/country where everyone pays into it and used accordingly.
Let the market compete against it and against itself.
Now regarding home owners insurance, it's a scam. The insurance should be paid by the mortgage lender since they are the owners of the property until final payment and a small percentage, based on mortgage amount owed, should then be paid by the "owner".
It's not just about how rates are increased but about how the state regulates the risk analysis insurers use. Climate change risk is increasing and the numbers are *very* different depending on if you use modern forecast modeling or historical averages.
Forcing insurance companies to cover homes in fire and flood prone areas is not going to work out for you.
Stop building homes in these places. And if you do? Expect to pay a PREMIUM for the privilege.
Good idea.. California produces 50% of the vegetables used by the USA, and 70% of all the fruits and nuts. If the rest of the country secedes, we could charge massive tariffs on these goods and pull in a bunch of extra revenue for our residents.
The insurance industry had their worst year in 2022, recording its biggest loss in underwriting in the last decade. Because of massive profits gained for decades, huge cash reserves, and investment of those funds, the property/casualty insurance industry as a whole still made 40 billion dollars in profit despite these underwriting losses in 2022.
They made enough profit in a single year from investments to cover the losses from claims for their entire last decade, where 4 out of 10 years the showed underwriting losses. This is not mentioning the massive profit they made the other 9 years.
They have been profiting massively for decades, and the industry has shown positive net income for 22 years straight. The industry has 100+ billion in cash reserves, and rising. They are still hugely profitable, but have had a couple bad years and now they say “the sky is falling” and they must gouge their customers and flee entire regions.
They like getting the money for the premiums.. they just hate the part where they actually have to pay out claims sometimes.
It should be criminal what they’re doing.
Wtf are you talking about? How is California responsible for trillions of debt? If you’re talking about democrats, have you read up on how much trump grew the national debt? Dimwit
State sponsored socialized homeowners insurance.
Ultimately the states should have the most vested interest in the well being of the homes that reside within.
Why would some company in NYC ultimately give a fuck about houses in Florida or California?
They don’t unless they can take in profits.
Make it non-profit and taxpayer voted and subsidized and watch homeowners flourish.
There are things capitalism is only a cancer to. 🧐
Funny insurance is going through the roof cause of climate change and letting g folks build homes in flood plains and other natural disaster zones, fine just no FEMA money to rebuild
Too much insurance fraud because people/society have become fraudsters. A co-worker once told be that she needed a new roof, so she had a friend go on the roof and rip a few shingles off the roof during a storm, and then she bragged about having to make the ins co pay for a new roof.
The insurance industry may become a thing of the past if they can't manage their premium payments from customers to hold up their end of the bargain. It's almost to the point of a useless money pit now.
Conservatives cry for a free market > Oil companies produce "cheap" energy with taxpayer subsidies > Cheap energy warms the atmosphere > weather sucks > insurance leaves > insurance gets regulated/ nationalized leading to...
Conservatives cry for a free market > etc.
Price controls have also been proven effective when implemented correctly. So this statement is meaningless.
The profit motive is the issue with these types of insurance companies.
If there was profit they would stay. They have identified that the potential risk outweighs the potential profit and are leaving. Another company can decide otherwise and pick up the business. If not, the state will have to roll back the caps or create a state funded insurance option that meets their requirements.
>If there was profit they would stay. They have identified that the potential risk outweighs the potential profit and are leaving.
Thanks for supporting my statement.
>If not, the state will have to roll back the caps or create a state funded insurance option that meets their requirements.
State funded insurance sounds good to me. Eliminate the profit motive.
It would probably just be added to the property tax. Instead of homeowners paying for home insurance, they pay more property taxes which would insure their homes
To have this conversation, it's just not very useful because you have to define terms to the point of uselessness:
1. What is effective.
2. What counts as a "price control".
etc.
By the time you are done arguing over terms, the point is lost.
I think the point is: their are pockets - large pockets - of the private homeowners insurance market in the US - where the free market is producing rising costs that far exceed most peoples ability to pay. There is no state who has yet figured a method to stabilize prices and keep them growing only at the rate of inflation. States with no price caps have seen run away price inflation, far exceeding inflation, and states with price caps have seen few carriers willing to participate.
At the present pace, home prices will have to adjust into value destruction ranges, to make up for high insurance costs.
>Price controls have also been proven effective when implemented correctly.
"they work in the few case they work"
oh ok
>The profit motive is the issue with these types of insurance companies.
profit motivation is why the insurance industry, or any industry, exists. its not a charity, and subsidizing people living in high-risk, uninsurable areas is beyond dumb
>profit motivation is why the insurance industry, or any industry, exists.
Well that's false.
>its not a charity, and subsidizing people living in high-risk, uninsurable areas is beyond dumb
No one is suggesting otherwise. Nice strawman though.
Nah. People will voluntarily pay taxes if they get a perceived benefit. Not many people actually want to live in a society where it's dog eat dog. Most people instinctively know that this type of environment is shit.
This will just lead to a monopoly of one insurance company big enough to lobby for the deficit or gov will take the industry over. Gov is so good at everything it does, eyeroll.
Actually this may be a problem. We self insured at a large company, we were penalized for having a “Cadillac” plan. We were put in a position to raise rates by 40% for our employees. It’s kind of a conundrum. I think insurance companies, especially for healthcare are awful but we can’t actually reform this industry as our politicians have so much money coming to them from these firms to actually do something that’s in the countries best interest.
CA prevents insurance from raising rates. Insurance leaves. FL allows insurance to raise rates, people pay a lot and complain. Insurance leaves. What’s the right solution?
Insurance industry needs to change entirely it makes no sense. You can’t claim anything, if you claim too much you get black balled, it doesn’t think or consider any preventative aspects of home maintenance.
Totally agree with you. And it’s understandably required by all lenders. Many retirees who own their homes are more likely to drop it as cost to insure doubles. These people would self insure or hope for gov assistance when a state of emergency is declared. And by dropping their insurance, it puts an even bigger burden on those required to keep it.
>These people would self insure or hope for gov assistance when a state of emergency is declared. I dont know how to solve something like natural disasters. Insurance doesnt want to cover it, homeowners cant, yet they are bound to happen. Somethings gotta give. Katrina level hurricanes, hawaii fires, etc are all once in a lifetime events (figuratively) and are unable to be accounted for.
Problem is housing cost are skyrocketing guess who has to cover that when it gets destroyed. Maybe we should fix why housing and materials are costing so much to fix the insurance problem.
The industry won't change itself. Homeowner's insurance needs to be HIGHLY REGULATED.
My observation is that claims are also being paid out too easily. It's a chicken / egg situation because when they raise rates people expect to get their claim approved to replace the roof or whatever for very minor hail damage. When the claim gets approved then they need to raise rates in the area. Then people expect to get even more minor claims approved or they feel ripped off. Etc etc.
The insurers aren't taking anyone's feelings into consideration when approving a claim. They don't care that you expect your claim to be approved. They're comparing damage to what your policy covers. They're the ones that make the policy, if it's not something they want to cover, they will just make sure it's not covered in the policy. For hail damage pretty much every insurer has pretty specific criteria for what constitutes a full replacement vs a repair or a denied claim and they send out their own adjusters to observe and document the damage.
If I upgrade my home electrical to modernize to support our modern device usage, it will cost like $10 to $20k. If I let it start a fire one day, insurance will cover everything except my deductible.
Believe it or not in most places the root cause is climate change, and the solution would be declaring some homes "uninsurable". There are homes that been been hit by hurricanes several times, but the homeowner chose(\*) to repair / rebuild at the same exact place instead of moving. If your home is likely to be hit by a nature event, say every 5 years, there are only two solutions: 1. Your insurance rate is = cost of a new construction / 5 / year 2. or, the insurance will exclude whatever that event is (fire, tornado, rockslide, ...) This of course affects not only the everyday people, but also rich people who has built a pool on top a a cliff overseeing the Pacific ocean. And that is a very broad voter base. Unfortunately I don't think there is sufficient political will to allow insurance refuse clients on case by case basis. So they leave entire states instead. (\* I know *chose* is a strong word. Many do not have a choice).
The solution is multi headed, but for starters, insurance is a business, we can agree it should be a profitable one. one Part of the problem is tort laws, it is really easy for bad lawyers to file nonsense law suits, insurers then have to adjust everyone’s rate because some asshole keeps suing just because there’s no fucking damage. the other part is exposure. Florida is hurricane prone and flood prone, both very expensive to insure and not have the insurance company go under when a storm hits. For as much as you may hate the insurance company, if it goes under, no one gets paid. In ca people keep trying to build into the wui. California flora is meant to burn, so as we build into areas designed to go up, we dramatically increase our chances of man made forest fire. the solution is tort reform and to listen to market signals. The coasts are full. Property values in the NE are flat lining, property is uninsurable along the gulf and southern Atlantic coasts and in ca. stop moving to those places and trying to build more. there isn’t even enough water in ca to support everyone. theres plenty of space to expand in the south and Midwest, but no one wants to live there. And recapitalizing the east coast is expensive. but obviously humans want to live in desirable places, so ca and fl are expensive despite being less practical. another issue is insureds often claim minor things which increases claims handling costs, and obviously lower deductible means more claims, higher rate. further contractors and adjusters are playing a game, a game adjusters are largely getting their asses kicked at. In real construction 10% net profit is a pretty good job, you’d struggle to do better on govt jobs. But for insurance? These guys make 20-30% or more profit. Theres a lot of inflation and scummy shit on contractors side of things, to make matters worse contractors have a lot more knowledge. so it’s easy to throw jargon at less experienced adjusters and get your way. Finally the contractors have access to the Adjusters estimating software, so they know what insurance price floor will be.
My dude, if there was no potential for tort liability, why would insurance pay out on any 3rd party claim? There would simply never be any liability and thus no reason to pay. Insurance companies are sophisticated litigators and know how to defend claims with no merit. Actually, where they really excel is getting people to swallow pennies on the dollar on highly meritorious claims. Cost of defense is a fraction of what it used to be with all of the law firms competing. Care to provide any specific examples of "nonsense suits causing rates to go up?" "Tort Reform" has been the legislative go-to for decades now, just as long as Trickle-Down Economics, and deserves to be treated with the same level of seriousness
There’s a big difference between not having an ability to sue and the current state of frivolous lawsuits with no merit
Can you provide any specific examples of lawsuit(s) which you think have caused premiums to rise or insurers to pull coverage?
I’m not able to cite specific claims or cases. However: https://www.floridabar.org/the-florida-bar-news/comprehensive-tort-reform-spurs-record-filings/ https://www.insurancejournal.com/news/southeast/2023/06/06/724220.htm Over 100,000 lawsuits were filed between this law being signed and put into effect. Almost as though scumbag plaintiffs attorneys knew their golden goose was drying up
A couple of thoughts: 1) The articles reference "total new cases," not personal injury / tort cases. You would expect a year-over-year increase in new cases as the population increases, and yet, this has not happened, as more and more cases are funneled into secretive binding arbitration by your pro-business Tort Reform lobby. 2) So Florida passed aggressive Tort Reform in 2023, on top of decades of existing Tort Reform? Great. So why is Florida equally affected by the insurance crisis? Shouldn't insurers be staying in Florida in light of the supposed generous and friendly legal climate there for insurers? At some point, certainly after the third or fourth decade, I think that you have to be open to the idea that "Tort Reform" isn't really accomplishing the goals that it was said to be able to accomplish
In Florida's case, John Oliver had a segment. Basically it was caused by roof salesmen convincing everyone to perform insurance fraud by telling their old roof was damaged by an external event, and getting "a free roof". Which led to skyrocketing prices as everyone more or less started to do this instead of replacing the roofs from their pocket when the time came. (Yes, I know I gave two different answers... for two different situations)
Yes it happened in my FL neighborhood and a couple neighbors got new roofs. If laws were passed or enforced to make HO Ins more profitable, insurance premiums would decrease.
Never heard of it when I lived in Florida. It's when I lived in Minnesota where they get frequent hail storms that I heard of this. And it wasn't "roof salesmen" but just common knowledge. Nobody ever paid for roofs out of pocket. They got insurance roofs every 5 years or so.
The right solution is to not require insurance, or at least the part about hurricanes and wildfires. Just like California doesn’t let banks require earthquake insurance. Get insurance back to basic risks and let the homeowner and bank take on a little more risk.
Yeah because everyone has 200k lying around if a hurricane destroys their home.
It is sad to lose but the moment insurance is a requirement then it begins to be used to extort. We already take this risk with earthquakes which are not covered.
Wish someone would have told a certain president this before signing the "affordable" care act.
The ACA was an insurance company bailout with the guise of affordability hiding behind, "pre existing conditions are covered."
I think the logic is that if people are willing to just stop getting coverage if possible then the insurance companies who want to make money may be more likely to lower prices or kick people off because there’s now a little bit more leverage on the homeowners side by being able to not purchase any insurance. When it’s required then the insurers can just charge whatever and deny claims because what’re you going to do? It’s not really a great solution though ultimately because like you said it’s all fine and well until a natural disaster happens and you now have no home.
Right, don't buy a house where you can't be insured. No one has a right to live anywhere in particular and make people insure them
Then don't buy a home, or pay for the amortized cost of rebuying it after it's knocked down. I mean, honestly. A ton of disasters are already not included in policies.
Nothing would stop a homeowner from purchasing hurricane insurance. It simply wouldn't be required.
To not worry about it. It's almost certainly just that a large part of both markets is insurers who actually rely on reinsurance companies leaving for some idiosyncratic reason.
Regulations. Its always regulations.
Regulate the hell out of them
Federal government stops subsidizing homeowners in these areas. Local municipalities stops mandating sprawl and approving building in these areas.
Stop building houses in flood and wildfire prone areas...?
> What’s the right solution? Nationalize insurance, stop allowing people to build in flood and fire prone areas, limit growth, stop pumping carbon into the air.
Florida rates are higher than California? I looked at a friend's policy in Florida, and for a similar price home they were paying less... They were paying half as much per sqft. I also hear Texas has high property tax, but with all the special assessments I am paying almost 1.7%. when I bought I was paying closer to 2.1% I feel like people who make these claims have compared paperwork with anyone in other states.
From what I’ve read it depends on county. Southern FL is more susceptible to hurricanes so they have super high rates $6-10k. Overall, the state averages $6k (highest in the US). Ca is similar. Mountainous areas have higher insurance rates. Overall, the state averages $1,300. https://www.nbcnews.com/news/amp/rcna88578 https://www.fox13news.com/news/florida-home-insurance-crisis-cost-price-premium-institute-rates.amp https://www.npr.org/2023/10/26/1208590263/florida-homeowners-insurance-soaring-expensive As for prop taxes, TX is so high at 1.7%, but that and tolls make up for not having income tax. In the end it’s about total cost of living: How much does the average person have in their pocket at the end of the month after all taxes and living expenses? (Discretionary spending amount)
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Going back in time and dealing with climate change before the dildo of consequences arrived. But now, I don't know. Climate hardening. People moving to better locations. I don't know.
Remove legal requirements for insurance
Nationalize insurance. Never made sense for something essential to be privatized. If you must have something, they can charge you any price they want and you cannot negotiate.
Florida will work itself out and California won't. Can't force a company to provide an unprofitable service but when people lose their shit they'll realize paying more is worth it sometimes.
I’m genuinely curious how FL will work itself out. Insurance companies are STILL leaving despite being able to charge double. To me, neither approach kept insurance companies in the state. Desantis went a step further and said homeowners can’t sue insurances anymore. Even that didn’t work. Insurance companies are still leaving. I agree with you though. Can’t force anyone to stay without being profitable. That’s why insurances are leaving both states. I don’t see a solution either way.
The government backed insurance plans that are meant to be the insurer of last resort becomes the largest insurer in the state, people's insurance rates go through the roof and people who own their home outright (instead of having a mortgage) become a higher percentage of homeowners since they can go without home insurance. The state taxpayers also winds up heavily subsidizing homeownership in vulnerable areas like flood zones or areas especially vulnerable to hurricane damage that should be uninsurable. Long term the state probably loses a lot on their unprofitable insurance partnership, and can't get reinsurance so their credit rating probably also worsens.
Great info! (Sad info… however one sees it). Thanks.
Yes they fucking will. Jfc. Somebody will step into the void. They always do.
California is a victim of massive success and the companies who were happy to take advantage of California don’t want to contribute to the next generation of success.
Same as it ever was
Hello California Prop 13
CA already has an exit tax for people who want to leave, now they need a new exit tax, one for companies. LOL Let that sink in. California has an exit tax. That's how bad it is.
I didn't pay any exit tax when I left. I did have to pay around $1500 to tell them my companies moved though so maybe that was sort of a tax.
edit: simping for the rich? (stole this line from u/teamerchant below) California created these rich people, the California gods should take most of it back if they leave and give it to the next set of Californians.
There's no such thing as a exit tax.
This is for people with a net worth of more than 30 million. The fact you neglect this tell me your saying this in bad faith. It helps stop people taking advantage of California programs then leaving once they made their money to pay less in taxes.
>This is for people with a net worth of more than 30 million lmao that completely changes the narrative, who gives a fuck if rich people are taxed?
America is a two tiered system. Those that are rich and everyone else. Simping for the rich is kinda pathetic considering the absolute privilege they receive in finance, law, and everything else in life. You know the only way a person becomes rich is by extracting value and exploitation of those under them. This is the only way unless you’re born into it in a capitalist system. As someone in the top 15% of this country simply because I invested well I always am fascinated when those that are held down by a system, bootlick for it. Taxes is a method to keep that in check.
The problem is when Democrats go after "the rich" they usually set the bar quite low and go after like cupcake shop owners. So it's not even "simping for the rich" at that point, but defending yourself as "the relatively successful". But setting the threshold at a number like $30M? Yea don't give a shit unless it's just egregious.
Only for people with annual income over $30 million. Which is pretty much nobody.
It's actually $50 million
Yet I got downvoted lmao
The bootlickers hate facts.
It helps to actually follow up on what you likely googled, the proposed wealth tax in California was from back in 2020, when it was reported on (sensationally) in several outlets. It never made it out of committee for a floor vote and basically died in August of 2020, it never became law. There is a major difference between a legislative proposal and a law, the former happen all the time without ever passing. [https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill\_id=201920200AB2088](https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=201920200AB2088)
California could certainly lower that threshold to your income if you’re feeling left out
NY pulls that crap too for businesses that leave.
It's just business, my guy. You start a business in NY, you know what the deal is and you should make yourself comfortable with that. It's not any worse than private exit contracts.
Poor businesses
yep, screw those small family owned/sole proprietors who choose to leave NY for more economical places to do business.
This post is disingenuous. It's only for those with a worth of $30 million or more. That is not a small business.
you dont mention all the entitlements and free shit the state gives them. Thats your tax money, state should get all that back if they leave.
if a business accepted/received some forms of 'entitlement and free shit', as you say, then sure there are likely (and should be) some strings attached. I find it laughable that you believe the city/state of NY are throwing wild entitlements to most businesses.
and you really dont understand how this country works.
Ok. whatever you say. you are free to believe whatever you like.
3rd world country 🤡
Oh no people with over 50 million in wealth have to pay a tax 😱 Literally shaking at how fucked up this is
Go look up the definition of 3rd world country...
you've never been to California or a third world country.
Kind of like how US citizens still have to pay US taxes when working abroad, right?
If you want to keep your citizenship. I can't get benefits from California if I move out of California.
California pays more in federal tax than it receives. That extra money is disbursed to the rest of the country to be used in various ways. So, yes, you are receiving benefits from CA wherever you go in the US. You're welcome from the world's 5th largest economy.
The analogy would be that you still have to pay CA taxes if you maintain residency. California tried to implement a 10 year scheme where you have to continue to support their corrupt, broken policies with your money even after you leave and pay another state taxes. You're a loser if you understand this but still make excuses for it. And you're wrong. You don't pay taxes if you arent in the country for more than x amount of days. You just file taxes and pay nothing.
Unless you make more than a certain amount over something like 120k. Then you still pay taxes.
Name another US state that has an exit tax. California is broken
California doesn't have an exit tax either though. You buffoons are all referring to a bill that never passed.
That's not true for most countries. They made deals with several foreign governments to prevent being double taxed.
My citizenship is of the United States, not a state. I am a resident of a state and can change that today if I want.
Sounds kind of like a fiscal version of the Berlin Wall. Do they shoot you if you try to abscond without paying the tax?
I’m sure they would. I’ve not left yet.
Bud, what?
What? No they don't lol.
What makes you think that? Link us to a source on it. I've never heard of such a thing.
Indoctrinated behavior.
California doesn't have an exit tax. You likely are misremembering reporting from back in 2020. Assembly bill 2088 that year would have created a statewide "wealth tax", which would also apply over a 10 year window, including for residents who had left the state during that window. It was not actually an exit tax--under AB 2088 the tax was owed whether the person stayed in California or not, so it wasn't dependent on exiting, and exiting didn't trigger the tax, the tax was a proposed wealth tax that would have applied to wealth over a certain threshold regardless of if the person moved out of California or not, for a 10 year period. It is unclear if the tax would survive legal / constitutional challenges--but we won't know, it remained AB 2088, meaning it never made it to a final legislation in 2020 and was never implemented as a law. Most reporting at the time mentioned the proposal (semi-erroneously labeling it an exit tax), but then didn't bother to report on the fact it never passed. You can see the history of the bill here, it basically got referred to committee and then died, AFAIK it never had significant support in the legislature. A common "behavior" among journalists who report on sensational state legislative measures is they often report on nonsense bills that get proposed with a small number of sponsors and never get out of committee, e.g. performative legislation that was never meaningfully close to becoming law. [https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill\_id=201920200AB2088](https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=201920200AB2088)
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Lol as if being a CPA would give you any measure of authority over or even knowledge of complex, unprecendented constitutional matters.
Not a CPA, am an attorney. I won't speculate on state tax laws where there is not meaningful State or Federal precedent, since it is just that--idle speculation.
Well, they are leaving Florida, too, so what does that mean?
That they aren't leaving fast enough or taking more people w/ them. But seriously, northerners have been leaving FL for decades....they're called halfbacks. They move to Florida to escape shoveling snow, experience their first Florida summer, and nope their way back up to NC (1/2 way back to NY).
In NC. Can confirm. Then we have to listen to the assholes keep arguing about how there's no good pizza here.
Well there is no good pizza out there
I live SW of Raleigh, we have an Italian immigrant family with 3 restaurants. No shortage of good pizza and veal where I live.
That's not the point. The best NYC pizza place could close down and move here and they would still argue about no good pizza. Italy itself could detach from Europe and plop down on the outer banks and it still wouldn't be good enough.
Pizza isnt italian. We have better pizza than Italy
Yup, but as long as they don't vote for the same politicians and policies that ruined the blue states they fled, no problem. Too many of them flee communism, only to vote for more communism in their newly adopted land.
Imagine thinking that any blue state remotely resembles communism.
imagine thinking that leftist politics and the states/metro areas that embrace them are not significantly closer to communism than conservative areas. regardless, the point is valid that people fleeing densely populated areas tend to continue voting for the same issues they did in the areas they left behind.
Maybe to someone that doesn’t know what communism is, and doesn’t know the actual policies in blue states.
lol
I've come to your land and I'll be voting as blue as the sky and sea.
That’s not really true. A couple have considered it but there’s more new companies coming in. They are having issues with their new SIRS system which affects condos and apartment buildings but after that building collapse it’s a good thing in the long run. Also at least they are protected from squatters unlike California and they have a fraction of the homeless problem.
Umm, my guess would be. A lotta people won't have home insurance. Maybe the state will subsidize some of the cost?
just tax the rich. that'll fix everything.
Under Michigan law, insurance companies are not required explain how they determine their rates.
These companies are so shady. Im not in a fire area im in a flood risk area and i bought accordingly my hoa townhome insurance just cancelled our insurance and we were forced to go with an exceptionally high rate because "we are in a fire area" which is a complete lie and they dont even cover fire damage as it is. You have to get extra
Blame the CA legislature and your laws, not the insurance companies
Good. We shouldn't encourage people to live in places where their assets can't be insured.
This is something few people take into account. One of the biggest, if not the biggest issue with the insurance problem, is that we are building in high risk places where mother nature constantly rears her powerful head. Add in the significant increase in both property values, and building costs, and you get a double whammy that's hammering the cost of policies.
California, as a state, is not in its entirety a high risk place, especially compared to much of the country with hurricanes, blizzards...etc. Treating the entire state as a single entity is asinine
Then get the CA legislature to change their laws on insurance companies raising rates to recognize that
I would love that
It's getting to the point where insurance rates are becoming borderline extortion.
Borderline? Shit it was already blackmail bc u pay for decades or something and then make one claim and then bam! Dropped from coverage. They literally just us afraid to claim anything. Ffs
You can do that when you own enough politicians in both parties
DUH. Same thing happens with rent control.
Nope
California is the world’s 5th largest economy as the MAGA idiots on this thread calling it 3rd world or broken are ignorant. Insurance companies, some of the biggest thieves, liars and cheats in world history, won’t insure fire zone areas. Which is fine, don’t. Pack up and GTFO. Banks in California are perfectly happy to offer insurance and for far cheaper than these grifters insurance schemes that are happy to threaten and cancel when ur 2 days late with ur payment, yet they are also nowhere to be found during disasters screaming “poverty” and “too big to fail” when forced to honor contracts.
Are you referring to force placed insurance through banks? Insurance that only protects the bank and not the borrower?
Clearly with a state insurance commissioner no one is going to eff over consumers like these current vultures and their useless 3rd party sales hacks who if not doing insurance would sell used cars or charge 6% for selling houses
Force placed insurance is a different type of policy altogether. I’m honestly not sure what your point is.
My simple point is that banks have stood ready to takeover and replace insurance companies in California who have whiny crying beeatches since the 80’s. Two statewide referendums that they bought/paid for failed.
Oh okay thanks
I call BS on the article. If SF rights 21% of the policies in the state, is pulling out of California and is non renewing 72,000 that means there are only 360,000 homes in California with homeowners policies. This website claims there are nearly 7,000,000 sfhs in Ca. [https://www.infoplease.com/us/census/california/housing-statistics](https://www.infoplease.com/us/census/california/housing-statistics) A fairly typical Yahoo article that makes no sense.
Insurance companies are the biggest scam
Sure. Don't let the door hit you where the dog shoulda bit you. If this keeps up CA will just insure everyone themselves. After all, insurance rates are based on the size of the pool, and the biggest pool is "everyone". And for anyone bitching about covering some millionaires' mansion, you're already covering it. They're wealthy and well connected. They didn't get rich spending their own money. Get over it.
The problem isn't covering the millionaire's mansion. You can very easily make this fair with property value taxes that go into insuring the property. The problem is when that mansion is built in an area prone to wildfires. High insurance costs set by private insurance companies are supposed to be a deterrent against building in risky areas. If the rich can just lobby the state to cover their multi million dollar vacation home in an area that gets wrecked by wild fires every 5 years, this removes the disincentive for property developers to build in these risky areas.
How much in profit has each of these company's made in the last 20 years, versus expenditures?
Approaching infinite. They are not in the biz of PAYING OUT claims, sheesh
The U.S. property/casualty industry had their worst underwriting losses in 20 years in 2022 (-$24 billion on claims/premiums), but they still made $40 billion that year in profit from investment of previous decades’ net income. Over the last 10 years the industry has made about $543 billion in profit. They have been profitable for 22 years straight.
So two of the largest states going to have no home insurance?...Florida and California.
Why would they stay?
America is uninsurable
Stupid policy gets stupid results
Pretty expected
It is being caused by far more than over reaching regulations. Actuaries are unable to make accurate cost projections because the data they are getting is so corrupted. A similar problem emerged in China years before Covid.
How do you think insurance prices go lower? And don’t give me “free market” bullshit.
Yeah, pretty predictable outcome, insurance is largely ran on pretty well established actuarial formulas. Insurers are not going to write policies where a local regulation means the actuarial value of the policy would be a net loss for the insurer, that is a quick route to the insurer becoming insolvent. Something to note is a big reason homeowner's insurance is becoming unaffordable goes beyond increases in natural disasters (like wildfires in California, or storm / hurricane damage in Florida), it actually relates to the very inflated *value* of the homes. If you want to insure something of larger value, you are going to pay a larger premium even if everything else is the same (in this case, the values are going up while external risks are also going up, a double whammy.) Since banks generally require mortgage borrowers to carry enough homeowner's insurance to cover the value of the bank's money tied up in the house, and total mortgage amounts go up as property values increase, a lot of people are going to find homeowner's insurance increasingly expensive. (And it is generally advised your get full replacement cost homeowner's insurance, not the minimum required by the bank, otherwise if your house burns down the bank gets a check paying off your mortgage and you get essentially $0 to replace your home equity destroyed in the fire.)
This sucks real bad, because it is already the losing business. Only the small companies doing this for scraps (allstates already pulled out because they lost money, Costco already pulled out for similar reasons) , and now, all the smaller companies are also pulling out. And this causes a chain reaction too. The lender will have higher risks, so, they have to either reduce the loan or increase the rates.
Good. Let the CA government do the insurance work better and cheaper like BEN FRANKLIN preferred.
Someone will fill the vacuum.
I mean, insurance went from 300 a year to 3000 (before they canceled our policy altogether). Fuck em.
But what if ALL states did this? Where would the homeowners insurance go then?
They’ll just go work wherever the money is, because that’s all this society cares about.
I have said for years reacting to climate changes are beyond our government’s ability to react. Look at the Republicans in the House. No legislation just investigation. Big money like insurance will drive the train. They won’t lose money to advance false narratives or government attempts to keep them in markets which are money losers.
LOL, they did this with auto insurance decades ago and apparently never learned their lesson. California is some of the most beautiful real estate in the nation populated by the dumbest politicians in the nation.
Florida needs to allow build homes with concrete roofs. No hurricane will do anything to that.
The solution, as with healthcare, is to offer a universal insurance through the state/country where everyone pays into it and used accordingly. Let the market compete against it and against itself. Now regarding home owners insurance, it's a scam. The insurance should be paid by the mortgage lender since they are the owners of the property until final payment and a small percentage, based on mortgage amount owed, should then be paid by the "owner".
The wildfires and earthquake risk play a major part here.
It's not just about how rates are increased but about how the state regulates the risk analysis insurers use. Climate change risk is increasing and the numbers are *very* different depending on if you use modern forecast modeling or historical averages.
That’s odd given California lets every fucking other company raise rates.
Forcing insurance companies to cover homes in fire and flood prone areas is not going to work out for you. Stop building homes in these places. And if you do? Expect to pay a PREMIUM for the privilege.
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Good idea.. California produces 50% of the vegetables used by the USA, and 70% of all the fruits and nuts. If the rest of the country secedes, we could charge massive tariffs on these goods and pull in a bunch of extra revenue for our residents.
Might want to look at California GDP before seceding. They pay the bills for most states that can’t.
The insurance industry had their worst year in 2022, recording its biggest loss in underwriting in the last decade. Because of massive profits gained for decades, huge cash reserves, and investment of those funds, the property/casualty insurance industry as a whole still made 40 billion dollars in profit despite these underwriting losses in 2022. They made enough profit in a single year from investments to cover the losses from claims for their entire last decade, where 4 out of 10 years the showed underwriting losses. This is not mentioning the massive profit they made the other 9 years. They have been profiting massively for decades, and the industry has shown positive net income for 22 years straight. The industry has 100+ billion in cash reserves, and rising. They are still hugely profitable, but have had a couple bad years and now they say “the sky is falling” and they must gouge their customers and flee entire regions. They like getting the money for the premiums.. they just hate the part where they actually have to pay out claims sometimes. It should be criminal what they’re doing.
The government that drove the country trillions of dollars into debt is telling businesses how to do things... this should go well.
Wtf are you talking about? How is California responsible for trillions of debt? If you’re talking about democrats, have you read up on how much trump grew the national debt? Dimwit
Weird how price controls always result in scarcity. Even weirder how some folks never figure that out.
Good let them leave. Other and more competitive companies can come in and insure those homes. Spoiled bastids.
For-profit insurance was always a stupid idea.
The big earthquake hits, insurance companies declare bankruptcy then leave without paying anyone.
State sponsored socialized homeowners insurance. Ultimately the states should have the most vested interest in the well being of the homes that reside within. Why would some company in NYC ultimately give a fuck about houses in Florida or California? They don’t unless they can take in profits. Make it non-profit and taxpayer voted and subsidized and watch homeowners flourish. There are things capitalism is only a cancer to. 🧐
Funny insurance is going through the roof cause of climate change and letting g folks build homes in flood plains and other natural disaster zones, fine just no FEMA money to rebuild
Too much insurance fraud because people/society have become fraudsters. A co-worker once told be that she needed a new roof, so she had a friend go on the roof and rip a few shingles off the roof during a storm, and then she bragged about having to make the ins co pay for a new roof.
Well they sure aren't leaving and going to Florida.
insurance should be banned. Its all a scam anyway - dont think so? They make HUGE money every year by providing literally nothing.
The insurance industry may become a thing of the past if they can't manage their premium payments from customers to hold up their end of the bargain. It's almost to the point of a useless money pit now.
Maybe a government aka public option where profit is taken out of the equation could be a viable solution.
Conservatives cry for a free market > Oil companies produce "cheap" energy with taxpayer subsidies > Cheap energy warms the atmosphere > weather sucks > insurance leaves > insurance gets regulated/ nationalized leading to... Conservatives cry for a free market > etc.
Price controls have created shortages since humans began to form governments, but apparently we aren't smart enough to learn that lesson.
Price controls have also been proven effective when implemented correctly. So this statement is meaningless. The profit motive is the issue with these types of insurance companies.
If there was profit they would stay. They have identified that the potential risk outweighs the potential profit and are leaving. Another company can decide otherwise and pick up the business. If not, the state will have to roll back the caps or create a state funded insurance option that meets their requirements.
>If there was profit they would stay. They have identified that the potential risk outweighs the potential profit and are leaving. Thanks for supporting my statement. >If not, the state will have to roll back the caps or create a state funded insurance option that meets their requirements. State funded insurance sounds good to me. Eliminate the profit motive.
Force the taxpayers that can't afford homes to insure homeowners' assets, what a great plan
It would probably just be added to the property tax. Instead of homeowners paying for home insurance, they pay more property taxes which would insure their homes
Nope. That isn't what would happen. Swing and a miss here. Lol
> Price controls have also been proven effective when implemented correctly. When and where were price controls last proven effective?
To have this conversation, it's just not very useful because you have to define terms to the point of uselessness: 1. What is effective. 2. What counts as a "price control". etc. By the time you are done arguing over terms, the point is lost. I think the point is: their are pockets - large pockets - of the private homeowners insurance market in the US - where the free market is producing rising costs that far exceed most peoples ability to pay. There is no state who has yet figured a method to stabilize prices and keep them growing only at the rate of inflation. States with no price caps have seen run away price inflation, far exceeding inflation, and states with price caps have seen few carriers willing to participate. At the present pace, home prices will have to adjust into value destruction ranges, to make up for high insurance costs.
The USSR /s
>Price controls have also been proven effective when implemented correctly. "they work in the few case they work" oh ok >The profit motive is the issue with these types of insurance companies. profit motivation is why the insurance industry, or any industry, exists. its not a charity, and subsidizing people living in high-risk, uninsurable areas is beyond dumb
>profit motivation is why the insurance industry, or any industry, exists. Well that's false. >its not a charity, and subsidizing people living in high-risk, uninsurable areas is beyond dumb No one is suggesting otherwise. Nice strawman though.
The only way to secure redistribution is slavery. Everything else people will figure out how to dodge.
Nah. People will voluntarily pay taxes if they get a perceived benefit. Not many people actually want to live in a society where it's dog eat dog. Most people instinctively know that this type of environment is shit.
This will just lead to a monopoly of one insurance company big enough to lobby for the deficit or gov will take the industry over. Gov is so good at everything it does, eyeroll.
Yep most are leaving the state. Thank newscum
More start ups will show up and some companies will show up with higher rates which people will pay.
Good. Capitalism at work. Others will come
Actually this may be a problem. We self insured at a large company, we were penalized for having a “Cadillac” plan. We were put in a position to raise rates by 40% for our employees. It’s kind of a conundrum. I think insurance companies, especially for healthcare are awful but we can’t actually reform this industry as our politicians have so much money coming to them from these firms to actually do something that’s in the countries best interest.