Current Events > State Farm no longer offering home insurance in Cali because people use it

(+) Yeah! (+)

https://www.cnn.com/2023/05/28/business/state-farm-california-insurance-wildfire/index.html

undefined posted...
State Farm is stopping new home insurance sales in California, citing wildfire risks and skyrocketing construction costs, the company announced Friday.
The insurance giant stopped accepting applications for all business and personal lines property and casualty insurance in California on May 27. However, State Farms decision does not affect existing auto insurance.
State Farm General Insurance Company made this decision due to historic increases in construction costs outpacing inflation, rapidly growing catastrophe exposure, and a challenging reinsurance market, the company said in a statement.

California has seen an average of more than 7,000 wildfires each year, consuming an average of over 2 million acres, over the past five years, according to data from the governors office. Scientists and California authorities blame the climate crisis for the intensity of the fire seasons.

While insurance companies prioritize their short-term financial goals, the long-term goal of the Department of Insurance is protecting consumers, California Department of Insurance spokesperson Michael Soller said.

The factors behind State Farms move are beyond the agencys control, Soller added.

Its important to note that current State Farm customers are not affected, and no non-renewals are being issued as a result of this announcement, Soller said.

State Farm, which is the largest provider of auto and home insurance in the US with its affiliates, claimed it would still work with the California Department of Insurance and lawmakers to build up market capacity in the state.

However, its necessary to take these actions now to improve the companys financial strength, State Farm said, adding it will reevaluate according to market conditions.

The Illinois-based insurance group said its agents will continue to work with existing customers.

Last year, American Insurance Group said it would pull policies for multimillion-dollar homes in California, partly because of wildfire risk, the Wall Street Journal reported.

"Like an asshole is there, fuck you."

This wouldn't have happened if they didn't recast Jake

Wow this is a very not good neighbor thing to do

Insurance companies HATE paying out claims

They should be forced to shut down then. Operating an insurance company should never guarantee a profit. In fact, you might go in the red sometimes.

Bottom line:
If you accept the monthly payments then you need to cover any and all damages. Otherwise, its a scam. The entire concept of insurance needs to go away.

Payzmaykr posted...

They should be forced to shut down then. Operating an insurance company should never guarantee a profit. In fact, you might go in the red sometimes.

Bottom line:
If you accept the monthly payments then you need to cover any and all damages. Otherwise, its a scam. The entire concept of insurance needs to go away.

The only way that happens is if insurance is done by the government and paid for with taxpayer money. If a private insurer is paying out more money than they're bringing in for long enough they're eventually going to run out of money and won't be able to pay any claims.

We want your money bur don't want to pay out when something happens

Derwood posted...

Insurance companies HATE paying out claims

Well yeah, their entire business is structured around paying out as little as possible

Insurance sucks.

Payzmaykr posted...

They should be forced to shut down then. Operating an insurance company should never guarantee a profit. In fact, you might go in the red sometimes.

Bottom line:
If you accept the monthly payments then you need to cover any and all damages. Otherwise, its a scam. The entire concept of insurance needs to go away.

Did you even read the article? They have too many houses insured in a particular region, so they are no longer accepting any new policies. This is pretty normal and standard.

Places with regular natural disasters will see this more and more as climate change gets worse. If an entire neighborhood gets destroyed in a fire or hurricane, and you've chosen to insure the whole neighborhood, you are in serious trouble.

Makes sense.

People that build in hurricane, tornado, wildfire areas are just asking for it.
Insurance companies are about profit and do to that they need to mitigate risk.

I don't sympathize with the Cali folk any more than the Floridian ones. Manage your state better.

It's why insurance is so scammy. The whole business model relies on not providing the service you are paying for.

Isnt this happening in Florida too? Though people probably dont care as much about Floridians

EndOfDiscOne posted...

Isnt this happening in Florida too? Though people probably dont care as much about Floridians

Some companies just don't offer flood insurance there. Don't think anyone pulled out entirely.

What the fuck is the point of insurance then?

Humble_Novice posted...

What the fuck is the point of insurance then?

To scam you. That's it. Even when you have a claim they will fight as hard as they can to deny you.

Humble_Novice posted...

What the fuck is the point of insurance then?

The closer disaster gets to a sure thing, the less worth it it is for the insurance company.
It's like gambling. The house is never going to host a game where they don't have superior odds.

The point is to protect you in an emergency, not subsidize you living in a fucking disaster zone.

Tyranthraxus posted...

To scam you. That's it. Even when you have a claim they will fight as hard as they can to deny you.

To top it all off, if you never use your insurance they do not provide paybacks or discounts based on your service even if they're advertised as much. I've never had a car accident ever and been insured for about 18 years. For some reason my rates keep going up and up and up.

lol expecting profit driven entities to actually give a fuck about you

opopopza posted...

Did you even read the article? They have too many houses insured in a particular region, so they are no longer accepting any new policies. This is pretty normal and standard.

Places with regular natural disasters will see this more and more as climate change gets worse. If an entire neighborhood gets destroyed in a fire or hurricane, and you've chosen to insure the whole neighborhood, you are in serious trouble.

Don't excuse them for their clown world approach to business where TOO MANY CUSTOMERS damages their profit margin.

Old jake would never let this happen

Derwood posted...

Insurance companies HATE paying out claims

This.

They will do everything they can to make sure they keep all the money you're giving them.

If they can legally stop offering coverage then I should get ALL premiums back.

cant have it both ways

opopopza posted...

Did you even read the article? They have too many houses insured in a particular region, so they are no longer accepting any new policies. This is pretty normal and standard.

Places with regular natural disasters will see this more and more as climate change gets worse. If an entire neighborhood gets destroyed in a fire or hurricane, and you've chosen to insure the whole neighborhood, you are in serious trouble.

Sounds like that should lobby against big corporations that support actions that lead to more wildfires.

Payzmaykr posted...

They should be forced to shut down then. Operating an insurance company should never guarantee a profit. In fact, you might go in the red sometimes.

Bottom line:
If you accept the monthly payments then you need to cover any and all damages. Otherwise, its a scam. The entire concept of insurance needs to go away.

theyre not taking new customers. It doesnt say anything about canceling existing policies

Gritty posted...

If they can legally stop offering coverage then I should get ALL premiums back.

cant have it both ways

They're not canceling current policies, just not taking on new policies for the time being.

That's a lot of potential customers they are turning away. Wouldn't want that to bite them in the butt... or would I?

Jake from State Farm didn't die for this.

Gritty posted...

If they can legally stop offering coverage then I should get ALL premiums back.

cant have it both ways

You really don't understand what is happening hth

lol

[LFAQs-redacted-quote]

Ye. The alternative is socialism, and that is just too crazy.

https://www.ocregister.com/2023/05/26/state-farm-says-no-new-property-insurance-clients-in-california/

Instead, the DOI is focusing on protecting consumers through its Safer from Wildfires discount program, Soller said.
Established in October 2022 and touted as a first of its kind, the state program requires insurance providers to discount policies for property owners who mitigate wildfire threats by installing fire-rated roofs, enclosing eaves and creating ember-resistant zones. Insurance companies have 180 days to submit a wildfire risk assessment or score, which the state can appeal.
Property insurers in recent years have pulled coverage from tens of thousands of homeowners across the state in the wake of devastating wildfires.

DOI Commissioner Ricardo Lara in September 2022 invoked a law signed in 2018 by then-Gov. Jerry Brown prohibiting insurance providers from canceling or refusing to renew plans for properties affected by wildfires until 12 months after the fire.

A moratorium on insurance price increases during the pandemic only heightened tension within the insurance industry.
Risks are getting worse, and rates are going to have to go up to ensure insurers are solvent and operational in California, Seren Taylor, a senior legislative advocate with the Personal Insurance Federation of California, told the Bay Area News Group in August 2022.

https://www.bloomberg.com/news/articles/2022-10-19/california-becomes-first-in-us-to-mandate-wildfire-insurance-discounts

The California Department of Insurance has issued rules that require insurers to offer discounts to property owners for reducing wildfire risk, which its calling the first of its kind in the US.
This week, the agency in partnership with Governor Gavin Newsoms administration released Safer From Wildfires guidelines detailing steps that can be taken to get the discounts. These include protecting homes and businesses with Class A fire-rated roofs, creating ember-resistant zones by clearing vegetation and flammable debris, and establishing a community evacuation plan.

tl;dr: price controls made it non-viable for insurance companies to operate in the state.

I, for one, will appreciate my costs not going up due to people building in wildfire and other natural disaster areas.

Blbmbr666 posted...

I, for one, will appreciate my costs not going up due to people building in wildfire and other natural disaster areas.

Jokes on you, the rates are gonna go up anyways

Vokrent posted...

Jokes on you, the rates are gonna go up anyways

Not going up even more then.

Blbmbr666 posted...

Not going up even more then.

They going higher than "even more."

[LFAQs-redacted-quote]


fixed

To be fair, homes in California are incredibly expensive. It's the second most expensive state to buy a house in, with only Hawaii costing more. It's gotta be a major strain on the finances to cover houses that cost that much compared to all the other states.

wow CE really doesnt understand how insurance works

g980 posted...

wow CE really doesnt understand how insurance works

Is it magical and gives us money back?

The way I see this going is that as climate change gets worse several parts of the country where people live now are gradually going to become mostly uninhabited. As disasters like hurricanes and wildfires get worse and more frequent in certain places insurers are not going to be able to insure homes without charging exorbitant rates and people are going to basically be forced to move.

I remember when AAA cancelled our home insurance when we had to replace part of our roof. That's all it took for them to drop us, we had no other issues with our home for years.

Insurance is a scam, tbh.

g980 posted...

wow CE really doesnt understand how insurance works

Looks like we understand it perfectly

lilORANG posted...

It's why insurance is so scammy. The whole business model relies on not providing the service you are paying for.

Yep, I've said for years that Insurance is a fucking scam.

Anarchy_Juiblex posted...

The point is to protect you in an emergency, not subsidize you living in a fucking disaster zone.

This. Thats the governments job (just look at how its handled in the Midwest & South which are prone to tornados or hurricanes)