Insurance companies were the canary in the coal mine before the LA fires.
Insurance has been a means to spread risk for centuries.
Insurers are highly attuned to risks and more importantly, their costs.
They only decline to provide coverage when the cost seriously outweigh the risk.
That was their professional assessment for fire coverage in LA.
And yet our elected officials disregarded this natural alarm system.
Or do they just assume that the federal government will bail them out?
Link: https://www.investopedia.com/articles/08/history-of-insurance.asp
Replies to: Insurance companies were the canary in the coal mine before the LA fires.
California screwed the pooch.
From the article:
"California is the only state that heretofore hasn’t allowed insurers to incorporate the cost of reinsurance in premiums. Until this year, it had also prohibited insurers from adjusting premiums by using the standard industry practice of catastrophe modeling to predict a property’s future risk. Insurers could only assess premiums based on historical losses.
As a result, insurers are paying out $1.09 in expenses and claims for every $1 they collect in premiums. This is financially unsustainable, which is why many have pared coverage in areas at high fire risk with expensive homes. State Farm dropped nearly 70% of policy holders in one Pacific Palisades neighborhood where the average home price is $3.5 million.
FAIR now covers about half a million homeowners who can’t obtain private coverage. Its exposure has ballooned to $458 billion as of last September from $153 billion four years earlier, with $5.9 billion in exposure in the Palisades. Yet it has only about $700 million cash on hand to pay claims."
Link: Californification
You can say the EXACT same thing in FL, but you won't! Insurance companies are bailing on peeps
left and right down here because of storms, sink holes, whatever but because DeSantis runs around saying "free state of FL" on one gives a crap!
I'll say the same thing. Ditto for homes on barrier islands up the east coast.
Homeowners in risky areas need to start paying rates that reflect the actual risks. There are three ways forward, IMO:
1) Build homes in risky areas extremely inexpensively, making them easy to replace quickly and affordably.
2) Build homes in risky areas extremely expensively with a design built to survive the known risks (elevated in flood zones, flame retardant in fire zones, etc).
3) Continue the current system where people in low-risk areas subsidize the people in high-risk areas.
Of course Newsome expected a bail out and Joey delivered. Can’t say he didn’t react the same way
For the fine people of NC. But NC isn’t a Democratic hell hole that supports his fucked up agenda.
like people who live in hurricane areas and flood plains, there should be
little govt assistance.