In the past week and two days, two insurers have stopped writing homeowner’s and other property insurance policies in California.
California wildfires burning out insurers
On Friday May 28, State Farm Insurance Companies stopped writing homeowner’s and commercial property insurance in California. The Orange County Register, CNN, and NPR reported this. State Farm is California’s largest property insurer, with an 8.3 percent market share. The company will continue to serve existing policy holders and will accept applications for personal automobile insurance. In explaining their decision, State Farm cited the increasing wildfire danger and rebuilding costs. But in fact California might have provoked the exit. Their Department of Insurance has peremptorily ordered insurers:
- Not to cancel policies in wildfire-affected areas until 12 months have passed after any fire, and:
- To offer discounts to homeowners who take certain fire-risk mitigation measures.
Last week, the San Francisco Chronicle reported that Allstate Insurance Company, California’s fourth largest, also will stop writing new property and casualty insurance for homeowners, condominium owners, and commercial property owners. Allstate cited the same reason: the wildfire danger and higher rebuilding costs. Spokeswoman Brittany Nash wrote the Chronicle saying the company has to protect its existing customers. The next day, she said the costs of insurance are now higher than any premiums the policies could bring in.
The Chronicle quoted Rex Frazier, head of the Personal Insurance Federation of California, as saying the law does not even require insurers to announce such decisions. State Farm, Frazier said, took an unusual step by its announcement.
Apparently most insurers simply refuse to renew policies after wildfires, prompting the new regulation forbidding this. State Farm, alone among insurers, hasn’t done that since 2017.
Tyler Durden at ZeroHedge suggests California brought this problem on themselves, by refusing to mitigate wildfire danger in the forests where wildfires commonly start.
Terry A. Hurlbut has been a student of politics, philosophy, and science for more than 35 years. He is a graduate of Yale College and has served as a physician-level laboratory administrator in a 250-bed community hospital. He also is a serious student of the Bible, is conversant in its two primary original languages, and has followed the creation-science movement closely since 1993.
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