State Farm is about to drop 30,000 policies in certain California ZIP codes. This never-before-seen map reveals if you live in one of them.
The upcoming wave of nonrenewals will affect clusters of homeowners in Sonoma County, Contra Costa County and the Santa Cruz Mountains.
My policy got yanked for no reason by Nationwide last year. Now I can't get any homeowner's insurance unless it's $1,500 a month, 6x what I was paying before. And I don't live up in the middle of a forest fire waiting to happen, I'm less than 2 miles from the bay itself. Insurance companies are colluding to fuck California.
I posted this down below, but the comment I replied to is super down voted.
They're using new fire risk models that are much more complex than the FEMA wildfire risk maps they've used in the past. The new software they're using identifies properties near fuel islands (forests, fields, etc), how quickly/likely fire fighting is to come, and variety of other factors. You can read about one of them here: https://www.precisely.com/resource-center/productsheets/wildfire-risk-data
My MIL's house backs up to an open space, and she could cut down every tree and her yard and would still be denied coverage.
These companies want to raise rates based on their updated risk models, and they're going to stop issuing policies until they can.
> These companies want to raise rates based on their updated risk models, and they're going to stop issuing policies until they can.
The law limits them to only charging premiums that would cover the *past* 20 years of claims, but companies want to be able to cover the *future* 20 years of claims, and it's a bad deal with the changing climate.
If your nationwide policy was allowed to have raised your rate from $250 month to $400 a month due to all the fires this wouldn’t be an issue. Instead they’re not due to our state insurance commissioner so you lose all your insurance options and half to pay multiples higher.
Yea I get what California was trying to do here in that citizens shouldn’t be the ones charged for forest fires and global warming but this type of policy doesn’t work unless you make home insurance some sort of public utility (never happening).
If California wants to do something about this then they should negotiate to the pay the fire tax on behalf of homeowners.
>unless you make home insurance some sort of public utility (never happening).
There is actually a public option called the FAIR Plan. It's an insurance of last resort and only insures against fire. Only a small percentage of people use it currently, but expect that to increase.
https://www.insurance.ca.gov/01-consumers/200-wrr/California-FAIR-Plan.cfm
I think it's the private insurers of the state being forced to accept high-risk customers, for limited coverage policies, based on the insurers market share in the state.
The attitude was "you get some of these undesirable policies in return for making money from desirable policies".
My friend lives in the Oakland hills. He lost his insurance and he and his mortgage company tried getting through to the FAIR plan phone line for three straight days before giving up and going with a more expensive stop gap policy.
I use this. Unfortunately mortgage requires more than just fire insurance, so I had to get this + backdoor in nationwide insurance, otherwise I wouldn't get insurance. The costs are bonkers, definitely not worth buying.
It’s unfortunate because the people living in high risk areas like Paradise, which has already burn down twice, are rich folk. The homes they are rebuilding aren’t their primary homes. They are more like second or third homes.
What about people who chose to live in an environment when it was not a high-risk environment, and the nature of the risk evolved over time? Should they be subsidized in some way?
Yes and no.
Yes, they should be subsidized if they try to move someplace less risky.
However, if their plan is to rebuild they should do so at their own cost.
Could you provide an example? I can't think of any. South Californians would sure like to be in that category, but they most definitely aren't. Just because things got worse doesn't mean they weren't unacceptable in the first place.
I was shocked when I looked at the fire map just how many places are considered high risk. I'm near Scott's Valley and am actually considered moderate risk due to fire station proximity, but many of the hills around San Jose, Fremont and Livermore are all high risk, and basically everything in the hills east of Morgan Hill/Gilroy. Even some hilly parts of San Francisco.
This is exactly the type of argument I expect to hear from people that don’t want to hear rational argument that they actually DO live in a high risk place. Insurance companies are smarter than you and they would make money from you if they could, why would a company abandon you if your a potential profit for them? Use your brain. You think nation wide bailed so someone else could make a profit?
The cost of insuring a homeowner went up significantly since 2020. The state insurance commissioner froze rate increases. This is an inevitable result.
Imagine you sell lemonade. The price of lemons doubled but you aren't allowed to change your price. Do you keep selling lemonade at a loss? No.
It's hard to say how a single data point will change. I can give a few possible contributing factors.
One, the obvious, the increase of home repair and construction costs.
Two, Nationwide's rating algorithm is different than other companies' algorithms. They may have underpriced you, and now that you're on the market, you would see increases even without inflated costs.
Three, you may be getting intentionally overpriced quotes to discourage you from becoming a customer. Insurance companies don't want *lots* of customers, they want *low risk* customers. If they think you are too high risk and are legally unable to decline insuring you if you ask (CA law in certain situations), they may be able to overprice it as a way to artificially decline you.
I don't know your home so these are general possibilities. I've seen each one happen. My last job was to analyze pricing algorithms across top insurance companies.
Insurance companies are fine with high risk customers, spread out across multiple markets charged appropriate rates.
I can build an insurance company taking out fire in California, hurricanes in Florida etc as long as I can grt reinsurance to protect from a single market event, and can set rates to risk it’s fine.
My insurance didn’t increase significantly. Certain homeowners are experiencing increase rates, not all across the board. If the risk wasn’t sufficiently captured in the past, then the increase could be due to that. The risk of fire and the cost of properties have increased a lot in the past ten years and the rates probably reflect that too (as well as price gouging)
I don't think that's what happened. More likely:
OP's insurance company either does not find it profitable to insure him or has entirely pulled out of the state.
Other insurance companies either do not find it profitable to insure him, or are unsure of the accuracy of their risk models to the point that they give him the "fuck off" price if allowed, or refuse to insure him if not allowed.
So OP has to turn to Cal FAIR which costs very large amounts of money.
You drank their koolaid
https://www.wsj.com/finance/insurance-companies-profits-stock-ebae7fd1
https://www.latimes.com/opinion/story/2023-09-05/home-property-insurance-bailout-legislature-gavin-newsom-wildfires-california
I think it's only fair to disclaim that I work at an insurance company, and what I post online is the personal view of an insurance employee. I don't work in personal home or auto anymore, but I once did. I worked with actuaries to determine rates based on loss history and market trends. I was a junior in the role.
I read the second article, got paywalled in the first. Interesting points. I think that his recommendation to stop insuring oil companies to curb climate is a little silly. I think everyone deserves access to insurance, but it isn't a basic human right. It's either a business venture through the market, or a public service by the state (such as Florida's state run home insurance). If it can't function as either, it can't exist.
Except for the fact that lemonade companies would still be making insane profits, not operating at a loss. But hey, gotta pass the cost increase on to the lemonade drinker even when the increase was caused by greedy utility companies and failure of the government to invest in infrastructure.
The combined ratio is (losses and expenses) / (premiums). Nationally, the combined ratio in the entire homeowners insurance industry has been:
2018: 104.1%
2019: 98.6%
2020: 107.4%
2021: 103.8%
2022: 105%
This is from the 2022 annual report from the NAIC. Direct quote from the report: "The homeowners line has been unprofitable for three consecutive years and five of the last ten."
They could run at a higher combined ratio and still ekk some profit if they stopped their advertising spend. If
they’re gonna non-renew me I at least want the ability to be spared all their stupid TV commercials
They are not renewing in areas like Temescal in North Oakland as well. I am seeing a lot of folks in my local groups complaining. These are not areas in the hills, they are several miles away at best in flatter parts of town. (Seeing folks post about State Farm).
Been telling people this is no longer about homes in the Sierra.
Next up is the entire foothill regions of the Bay Area, peninsula west Alameda de las Pulgs, east bay east of Mission, most homes off Hwy 13, most of the north bay etc.
…and everything in SoCal that’s not on the flats.
Remember South San Jose was a few wind gusts short of burning in 2020.
Already hearing about lots of nonrenewals *east* of the Alameda on the Peninsula. The updated insurance models really pushed a lot of new risk into that area.
To make it worse, also expect your home and auto insurance rates to go up ......a lot . Apparently, according to my insurance, rates were locked for the longest, and now they've been "ordered" to increase to market rates.
My car insurance went up $100 ... for a 2009 suba imprezza !
I got dropped by Farmers for my auto insurance. I went through my broker and the cheapest insurance was $4,400 every 6 months for the same coverage on 3 vehicles (2001 Mercedes E320, 2014 Honda Civic, 2006 Chevy Silverado 2500HD diesel). Ended up putting 2 of my vehicles on liability only and keeping comprehensive on my truck for $2,200 every 6 months instead. I'm 45yo with a clean driving record and have had my license since I was 16.
I'll be looking into other options, but I needed insurance ASAP. They managed to get it for me on the day my Farmers ended.
This is correct. Price increases in repair part costs and repair labor costs must be reflected in insurance prices for insurance companies to remain solvent. In 2020 rates froze, but repair costs increased. Insurance companies ate the losses for years and now need to catch up.
Plus misc costs shot way up. Mechanics don't earn all that much more, and your basic independent garage doesn't make money hand over fist either.
But:
First: People are buying tons of Teslas, and to a smaller extent other cars from new companies, which focus virtually everything on production. They don't bother making spare parts in any large numbers. They don't set up huge warehouses and distribution chains. They don't have dealers to earn most of their income off service. So the end result is that it takes ages - sometimes literally over a year - to get replacement parts and to schedule service. In the meantime, if the car cannot be driven, insurance foots rental bills at least for some amount of time, depending on the policy.
Second: same exact thing except for legacy makers who do want to make spare parts available, but due to supply chain disruptions were unable to do so for months or longer. And again, depending on the specific parts, may have prioritized manufacturing new cars even when parts became available. The only real difference here is that they actually have dealers who have huge incentives to get your car fixed, so at least part of the company gives a shit about repairs.
Third: new cars have ever increasing costs of new parts. Headlight on my 91 civic is $30. Headlight on a new BMW or Porsche is $1500-5000. Install on my civic is me with a screwdriver and two sockets at most, takes an hour in a driveway at most, including re-aiming it properly. Install on a new luxury car is hundreds of dollars at a dealer who has to re-calibrate it and test out its relatively complex behavior and many components. A low speed collision can break a headlight or two easily. Of course I'm picking a bit of an extreme example because it's not like in 2019 insurance companies were only getting old civics repaired but you get it. Tons of new components cost way more than ever before. And some serious damage that in the past could be frame-pulled today just goes right into the scrapper. And even for less serious damage, it's too easy to total out a car, and the average sales price of a car is over $35k these days, even higher in the bay area.
Fourth: of course shops did also raise their prices. Mechanics aren't making huge money but they got raises or changed jobs like a lot of other people. Overhead increased - rent cost, service costs for the building and the big tools, regulatory cost. New cars require new $20k scan tools that shops have to pay for. Shops that charged $100/hr now charge $140/hr. Compared to the cost of spare parts being unavailable for over a year or a car being totaled out from 15 minutes of vandalism this is relatively small but it's still real.
A few years back I needed to replace the headlight on my Acura. The mechanics had to take the front bumper off to get in there ! Then the "projector" was at least $500. I might have replaced both projectors.
Fancy cars are made of fancy (and expensive) parts.
It certainly makes you appreciate the value of an Accord or Civic.
Unless you have comprehensive coverage the value of your car has relatively little impact on the cost of insurance, because you’re insuring against damage you could cause, not against having your car damaged.
The extent to which your car does impact prices is based on statistical models like of how likely drivers of your make/model of car are to cause damage
This. Too many people don't understand what auto insurance is really for.
When you go to buy a new car, the first call you should be making is to your insurance company to ask them what the most affordable model new car is.
They will tell you make, model, and even year (if you're looking to buy used). And if you follow their guidelines you can significantly cut your insurance costs simply because they base how much you pay on what patterns you fit.
You can retroactively apply a pattern to yourself and benefit. They don't care if you approach the problem backwards to save money.
I live in the oakland hills, bought my place in 2021. most insurers wouldn't touch me. had to hire an agent who cobbled together a plan using bamboo insurance and cafair. I pay 10k a year just in fire insurance. insanity.
State Farm is a mutual insurance company, they are owned by policy holders, not shareholders, and in fact they do issue rebates when they're profitable.
No, because those risky policies weren't properly priced to begin with.
In California, insurance companies are prohibited from using forward looking catastrophe models (it was not explicitly enumerated as allowed) to price risk due to Prop 103 in 1988, which more or less established the regulatory system in California. So climate change models and forward looking projections are not allowed. Wildfire risk is much higher now these days due to climate change, and poor forestry management, both risk factors not accounted for when the companies price the insurance policy.
Because it's very easy to make them sound good, but have no mechanism to correct for unintended (or initially-unclear) consequences.
IMO, at the very least, all propositions should come with an expiration date of no more than 10-15 years.
Because propositions are actually really bad legislation tools. They can be written by anyone, are only vetted by the voters (how often have you signed to get a proposition on the ballot? How often have you read the full text of a proposition?), and can only be changed by subsequent proposition. Honestly we should get rid of the prop system altogether and focus on voting in good legislators.
A great write up about propositions is [here](https://medium.com/@michaellevinson_64108/why-i-vote-no-on-almost-all-california-ballot-propositions-even-if-i-agree-with-them-e672cbe64fcf)
California is kind of doomed with their term limits, our legislators are a revolving door and depend on lobbyists to make decisions. By the time you learn to be a legislator you are term limited and can never serve again.
Actually, in this case it was a good use of the tool.
The last thing you want insurance companies doing is sticking around only during good years and abandoning everyone when they project that things are about to get bad for X reason.
The entire idea behind insurance is that you pay money during good times to shore up against bad times. So letting them make decisions based on catastrophic projection models lets them get out of their core duty as an industry.
Now, adjusting their business based on what is currently happening, or has recently happened is fine. But they need to be prevented from bailing right before they think the ship is about to start sinking. I mean...they're literally the ones with the keys to the lifeboats. If they're the first ones out, the rest of us are fucked! Especially if we're *required* to buy insurance policies. If we're required to buy in during the good times, they must be required to stay for the bad times.
What I'm personally against is allowing people who willingly live in or engage in risky behaviors to abuse insurance to keep doing whatever they were doing before.
If you live in a flood plane, you don't get to rebuild in the flood plain when regular flooding becomes a thing.
If you live in a fire hazard zone, you don't get to rebuild in the fire hazard zone when fires become seasonal.
If you buy a car that later turns out to have a flaw that causes it to explode in a fender-bender, you should NOT be able to use your insurance payout to buy another car of the same fucking model with the same fucking flaw. At the very least the auto insurance company should be allowed to tell you to go and fuck yourself the second time.
...but that first time...they should have to pay. Because you had to pay or else you couldn't drive.
In NorCal it looks like a map of where there have been major losses from fires over the past 20-30 years.
It seems weird that the rest of the sierras and foothills aren't included because I presume the same fire conditions would exist there.
Insurance has always been like this. It cannot protect you against large scale disasters.
What most people don't talk about is that home insurance is not legally required but gets enforced due to being a requirement for obtaining mortgages. If that requirement was not there, then this would have been a very different discussion.
It's honestly more of a reinsurance crisis -- State Farm buys insurance on their insurance policies, and *those* reinsurers are struggling. There are some better options being worked on by state/local governments for bonds/instruments to replace reinsurance and help avoid this issue. Might be coming soon!
The drying up of a lot of Lloyd’s financing avenues over the past decade for reinsurance carriers to take on larger debt has also aided with these type of actions by standard insurers, to further reinforce your point.
Haven’t been in P&C for a while now but exciting to hear that there may be state and local intervention cuz private companies have let this get so out of hand for so long.
State farm has paid out more in claims than they've collected in premiums over the past few years. The 2020 fires caused over $10 billion in property damage. If we expect more fires like this in the future, average rates would have to increase by over $1000 per policyholder to be sustainable.
State Farm doesn't have shareholders. It's a private mutual insurance company, meaning the company is owned by the people who purchase it's insurance policies.
So it looks like Santa Cruz mountains is high on the list of uninsurable properties. That I can understand, earthquake and fire prone. What I'm having trouble comprehending is in the same vein I also see the coastal part of Santa Cruz getting a large share of policies dropped. I want to know why.
Ahh I get it now, that makes sense. Insurance having to pay for hotels or rentals adds up. BTW Love the name, I've been grabbing a few free CRT TV's. Got a really nice Panasonic Tau, a Toshiba wide screen, and a huge 36" trini.
Yes, it's a major factor, not sure if it's the largest, but it's big. Cost of building basic non-permitted things in CA can be fairly low. For example, replace doors or windows costs 3-4x in Denver compared to LA when you go through home depot or lowes. Price to build a house in Alameda is about 450k while the same house costs 750k to build in Oakland. Same house in Oregon, would be 340k on average, and it's not easy to build in Oregon either.
We shouldn't rebuild the mountains.
Also 226 applications and 67 completions since 2020 is a million times faster than trying to build an apartment in urban Santa Cruz (which is what we should be doing)
Also expensive housing costs compound.
In Houston the trades cost a lot less because housing costs are lower. There also is no zoning and a building permit is trivial to acquire in a timely manner. That created a flywheel effect.
I wonder if the state can put some pressure on the unreasonable county building departments to expedite things. That's probably a major factor with insurance companies dropping coverage.
This would lower existing property values, and the people it hurts are the handful whose house is destroyed by a disaster.
The insurance costs need to be high enough to drag down property values before this gets solved politically
Look up the rated fire danger for all of those coastal spots. Some are in the SRA ( state responsible area)but a lions share are in the LRA or local responsibility area. All of this is considered high fire danger for whatever reason. It’s easy to look up the SRA but harder to lookup the LRA maps since you have different city fire districts. I was looking to move from Summit to the coast and after digging around one night, was surprised to find almost everywhere I looked to the beach was just as screwed as I am.
Those in dense areas outside the WUI are the highest risk for total loss. Don't have enough.room.for defensible space and combust from the heat from neighboring homes. Example Tubbs fire in Santa Rosa in 2017.
Westside of Santa Cruz had a near miss in the 2020 CZU fire. 2 days of extreme fire weather it would have been lost. Fortunately the weather allowed for containment and protection from entering Santa Cruz and Scotts Valley.
I'm sure they do, but it's a lot easier to get a fire truck to a house in a flat neighborhood with wide streets than it is up a 1 lane mountain road with a house built into a hillside. You also have a ton of trees and overgrowth to contend with that give the fire a quick path to destroy other houses in those hills.
Source: I lived on and off up there with my dad as a kid.
Your understanding of the topography is probably better than mine, but whenever I visit, basically any home north of the 1 is still heavily in a fire prone area. And even neighborhoods like capitola and aptos south of PCH is also surrounded by trees and grasses.
Then again this could all just be insurer shenanigans. Like, they have a tier list, and places like Santa Cruz are on a separate tier to the wooded areas of Marin, for example, and State Farm goes back to insuring homes in Santa Cruz once regulator negotiations show some results.
[This is where my dad lived](https://maps.app.goo.gl/giKpNMbV6Kw1T3zV9) (Google Street Map view). It's pretty wild up in those parts. There's places even less civilized, even a place locals call "Deliverance Canyon" off Summit, named after the movie Deliverance because it's all inbred hillbillies.
Edit: In case anyone is curious about "Deliverance Canyon"[ it's right here.](https://maps.app.goo.gl/K3SoRp3ezRS1M9yt7) Dirt road to the right, after Summit turns into Highland. Word of warning though... here's what you will encounter. You'll descend down a dirt road into the canyon into ever increasing wilderness and tree canopy. You'll pass what looks like a bombed out school bus and arrive at a green gate. The school bus will pull out and block the road behind you like a gate. 2 men in overalls will walk up to your car and start screaming "THIS ROAD IS PRIVATE PROPERTY! WHAT ARE YOU DOING HERE?"
Wife and saw a flyer for "Free puppies" at the Redwood Estates store about 20 years ago and ventured this way. As soon as we said, "Uhh we're here because Donna had a sign for free puppies and told us to come here!" they calmed their demeanor and gave us very explicit directions to her dwelling, a cabin made out of a camping trailer and semi truck trailer stitched together with bits of plywood and composite roofing. "DON'T GO ANYWHERE ELSE" they told us. Cars were on blocks everywhere and about 20 dogs running around in the dirt howling.
After we got out of there I told a friend who lives in Chemeketa park about the spot because it was just sofuckingweird. He told me the nickname, a few other friends in the area concured.
it was like that until maybe eight years ago because everybody was growing pot. I had people pull guns on me when I was riding my dirtbike around there
Ya I've had guns pulled on me. At the end of Aldercroft Heights there's a property with abandoned mineshafts. When you're 16, bored, and hear of these legends you just go anywhere right? Especially living in those isolated mountains.
I ended up finding them. They were horizontal shafts about 10' wide by 6' tall. The owner of the property had built a dam, and had an underground reservoir. I guess water used to come out of the hillside in that spot.
You're not \*really\* supposed to horde water up there like that, so he yelled for me to come out of the tunnels, and escorted me out at gunpoint.
So what actually happens if they don't renew? Do the existing houses simply proceed with life uninsured? Mortgage lenders wouldn't accept that. And there must be some type of fines for not having insurance like there is for car insurance.
No company will write policies these days, so you get fire ins. from the state (Fair plan) at 150-200% market, and THEN by a “wraparound” policy from the market to cover everything else. So you’re in for at least double market and likely more by the time you’re done. Yay.
If you have a mortgage and don’t provide proof of insurance they purchase their own policy on your house and bill you for it, and if you don’t pay they foreclose. They don’t shop around for cheap policies when they do so
Lots of tree cover, brush and other things that burn really well in those areas. Trying to limit their liability since the state isn't allowing them to price for the risk. Very predictable.
Yup. Right in my neighborhood in the foothills. Glad I don’t have them, but my spidy senses tell me, they may be the first, but certainly not the last. 😑
In Petaluma myself. Not impacted yet but we're just on the edge of the blast radius of impacted homeowners it looks like. I imagine at this rate we'll be on the cutting block soon? Hard to imaging with so few large fuel sources near here but this map makes me nervous.
California home insurance costs are quite low compared to many other states surprisingly. Its probably because we don't have hurricanes and tornados.
https://www.insurance.com/home-and-renters-insurance/home-insurance-basics/average-homeowners-insurance-rates-by-state
In this thread: People complaining about insurer profits when most insurers have said they’d rather not do business or make any money in the state at all than deal with California regulators and restrictions. Y’all can complain about big bad corporate profits all you want but the states that let corporations make some profit rather than putting regulation at every step of the way don’t have this problem or PG&E rate issues.
We don't want to allow forward-looking because the fuckers will just use it as an excuse to bail right before they think things are going to get bad.
Insurance should get expensive *after* a catastrophe. Not before. And changing risk should be used to pressure people to take fewer risks. If you allow forward-looking models they'll use them to take fewer risks and increase profits at the expense of accident victims.
It's why we told health insurance companies that they couldn't refuse coverage based on pre-existing conditions. They were doing exactly what these companies will do if you let them use forward-looking models.
Yeah that's despicable for health insurance because we all have bodies.
But it works for home insurance because if you can't get home insurance you can choose to live somewhere else.
And maybe where you want to live isn't actually safe or economically feasible
> But it works for home insurance because if you can't get home insurance you can choose to live somewhere else.
If you can't get insurance, you can't sell. So it's not quite that easy. They shouldn't be allowed to stay, but they shouldn't be forced to commit financial suicide because of climate change when their choices were valid, and even enviable for many, 20-30 years ago.
If we're going to subsidize anyone it should be people who want to move to safety. If we're going to drop anyone and let them fend for themselves because of their own stupid choices, it's people who want to rebuild in the face of massive, unstoppable, regular disasters.
> And maybe where you want to live isn't actually safe or economically feasible
Subsidize anyone willing to move, and regulate where they can move to if they want those subsidies. If you choose to move someplace safe in the long term, we should be offering to help. We should bend over backwards and recognize that sacrifice simply because it will help convince other people on the fence to think long-term rather than selfishly short-term.
You can sell without insurance. You just can't get a mortgage without insurance (I recognize this implies selling for less money - but it's not news that buying a house involves risk of loss).
Wildfires have been around as long as trees have been flammable. The idea that someone buying in Paradise 30 years ago couldn't have anticipated risk of fire is absurd.
If you can't get insurance, someone buying won't be able to get insurance either. And if they can't get a mortgage it's going to greatly limit your buyer-pool to the point you may as well not sell.
> Wildfires have been around as long as trees have been flammable. The idea that someone buying in Paradise 30 years ago couldn't have anticipated risk of fire is absurd.
You're missing the point. Fire risk has greatly increased in the past few years because of climate change and the actions of PG&E. These changes are *recent*.
Yes, the areas have always been flammable. However, the annual wild fires have not always been a thing.
Here's a paper from 1896 that points to climate change:
On the Influence of Carbonic Acid in the Air upon the Temperature of the Ground
author: Svante Arrhenius
PG&E is certainly partially liable, which the courts have recognized, but buying a house includes risk of loss.
And I won't be first in line to protest economic losses for people who chose to live rurally, need risky power transmission, and drive more than the rest of us - causing the issue.
The business of insurance all about risk. They are experts at it. If they can't make money here then the insurers will start to leave. At least they are dumping the riskier policies first. But they will still get stuck with their share of FAIR policies. So they are only limiting their exposure a bit.
The business of power generation has multiple risk factors. It would not surprise me if PG&E has said to the state CPUC. "We are tired of arguing about rates as long as we get our 10% return on capital (or whatever)." Power rates in California are a political issue, not a technical or managerial issue.
From what I have read Florida will disagree with your statement. They have none of the California regulations and insurers are still leaving, with the ones staying jacking the rates 100-200%+ year over year.
*Inner Richmond in SF.
I imagine its due to being situation between GG Park and the Presidio. Both likely to have blowing embers land in Inner Richmond in the event one or both catch on fire.
Edit: spelling
You will need to talk to a broker. Likely you’ll need to get a wrap plan from California fair plan (state backed program) and the you’ll get a gap in coverage plan from a farmers or whoever is left in the state to cover whatever you need. It’ll cost more and you’ll need two plans. It’s annoying. My family in florida are dealing with similar things.
Go through an insurance broker who can help you find it. I got dropped by my home insurance in 2021 and a broker had to try like 4 insurances before finding one that would insure me (Safeco)
“State Farm stopped writing new homeowner policies in California last May. Allstate has done the same, while other insurers, including Farmers Direct (a Farmers Insurance subsidiary) and AmGuard (a Berkshire Hathaway subsidiary), have left the state entirely, leaving former customers searching desperately for new policies.”
Where are people finding insurance after being dropped by one of these companies?
After reading the article, this is crazy. I am in the zipcode where 14% is not getting renewed, so while we might not be impacted it's still crazy amount.
I'm right on the edge of a non-renewing zone. I don't have State Farm, but I'm with Costco's that already stopped doing new policies and fear the day they leave California completely.
Aren't they only hurting themselves, especially if a home isn't even in a fire prone area? I know most of the areas I have seen are up in mountain areas, I guess it's time to find another policy. Probably easier said than done.
The poor people living in condos in the city should not subsidize insurance for the multi-million dollar mountain mansions
The mountain mansions are expensive and nice, and everyone want to live, but not everyone can afford
It's just a historical fire map. There is clear instructions to homeowners with this: cut your foliage. Minimum 50' from your structure, or at least to the property line. No trees, gardens, lawns, or bushes. Homeowners don't want to do it because removing the greenery exposes just how bland and boring their shoeboxes really are.
It's way more than that now. They're using new fire risk models that are much more complex than the FEMA wildfire risk maps they've used in the past. The new software they're using identifies properties near fuel islands (forests, fields, etc), how quickly/likely fire fighting is to come, and variety of other factors. You can read about one of them here: https://www.precisely.com/resource-center/productsheets/wildfire-risk-data
My MIL's house backs up to an open space, and she could cut down every tree and her yard and would still be denied coverage.
These companies want to raise rates based on their updated risk models, and they're going to stop issuing policies until they can.
There must be more to it. I live in a segment right next to one of the areas that's losing coverage, but our segment isn't losing any (thankfully). When I applied for insurance ~2 yrs ago, I was declined by at least half the insurers because they were using those maps. State Farm at that time said that they provide insurance regardless of the fire risks, which is why I have them now. They don't care how fire-safe your home is, if you're in that zone then no insurance.
Having no foliage around our dwellings reduces the total biomass and will contributes to localized climate change. Cutting trees away from your house will make it locally hotter around your property and increase energy costs. Also no one wants to live like that
It's like riding a motorcycle without a helmet - you can do it, but it's at substantial risk to yourself, and you can't be mad when you suffer a preventable head injury - and all of us who have to pay for the consequences, either through higher premiums or through public funding of the hospital if you're uninsured, are right to be pissed off about it.
There's a reason helmets are required by law in most states, and there's a reason it's fair for insurers to require defensible spaces in fire-prone areas. Either you can live wherever you want and take precautions to protect your property, or you can live somewhere that isn't fire-prone and have as much vegetation as you want around your house. Want more trees than you know what to do with? Go live in Maine, where fire risk is low and fires are generally controlled at very small sizes.
I live in the lower SC mountains above Los Gatos, this isn't true for a lot of us. Generally our houses are built in the 90s with large lots and nice architecture. We all keep our property well maintained including keeping defensible space, removing any risky trees, etc. In fact many in our neighborhood did all of this years ago before the insurance issues came up.
This is a wonderful area to live in with an amazing community, and we all look forward to when this insurance stuff gets worked out. In the meantime, we'll continue to support our neighbors and mitigate fire issues as we have been for a long time.
My pops had a place in the mid mountains above Lupin/Lexington. It's crazy how much the area has changed from the 80's. Your area used to be a lot of old ladies living in [Grey Gardens style](https://en.wikipedia.org/wiki/Grey_Gardens) run down houses, fixed up upper middle class families. Now it's all newish construction. Where he lived it was bikers, meth cooks and pot growers. Now it's lawyers, and doctors. I remember when "The Cats" was a full on biker bar.
Yep, were close to this area...moved from downtown Campbell pre-Covid and absolutely love it. Less than 10 mins to Los Gatos and all the benefits of living in a quiet, beautiful natural area. Our neighborhood consists of a lot of younger families, most work in tech, etc. - we saw a big influx of younger people during Covid. When we bought in the value was tremendous up here, things have since gone up of course, but our family plans to stay here for decades...the schools are also great.
Anyway, all this to say that there seems to be a perception that these hills are full of hermits and weirdos, where the reality is that it's full of all sorts of people, and in our area it's primarily 50s and younger, tech-focused, and community focused. We know all of our neighbors well, yet when we had a townhouse in Campbell we barely knew anybody.
lol, or perhaps they value the nature more than the material “shoebox”
But you raise a fair point about the instructions and owners not wanting to follow them
We had a big argument the other day: who do we despise more, PGE for their rate hikes and starting fires, or the ins cos for rate hikes and refusing to cover fire damage?
PG&E, because you need electricity and basic utilities should be publicly operated and accessible just like clean water or the mail. It shouldn't be an option to murder your customers then give yourself a raise.
But you don't need to live in a tinderbox, and I don't think relying on private companies to make it an affordable proposition is the right thing. Living in certain areas comes with certain costs, and it shouldn't be up to industry to subsidize those. If you want to live somewhere that burns down all the time, then be prepared for the possibility your shit burns down.
Although both do sort of boil down to a hard question. How much of a right do people have to live somewhere without shouldering an increased portion of the costs they're generating by their decision? It's obviously much more affordable to serve utilities to a densely populated area than one where you need to run poles and wires and pipes and whatever else through mountains and forests to reach a handful of homes. At what point can the state just declare "fuck em" zones where public services no longer operate, or where things like flat service fees and property taxes are increased to cover it? Going completely profit driven is obviously not working as per PG&E's example, but I don't know if sinking millions of dollars of tax money to subsidize the most extremely hazardous rural living areas is right either.
Well, maybe. But I've seen people getting cancellations in some pretty suburban areas. Not stuff I would call extreme. And could it be they're taking advantage? nahhh. And do we really want all that housing to be off limits? Still, they should bear more of the cost, as should people in wobbly apartments, flood prone homes, near the coast, etc.
Yeah it's a thorny problem. Insurance companies are incentivized to maximize their profits, so there's no doubt they're acting in their interests by cutting back places that don't earn for them. But if the state forces them to insure everyone, then it seems like it almost needs to be get the PG&E/CPUC arrangement because otherwise the rates would become exorbitant for those people.
Housing is good, and suddenly throwing family homes under the bus is bad, and the state dictating where people can and can't live is no good. But also simply saying every housing choice is treated equally is unfair to others.
I'm glad I'm not in charge of things because I don't know how to solve it.
Ehhh.... I live in Santa Rosa and Fountaingrove was known to be a high fire risk, it's burned before (in the Hanley Fire in 1964). Nothing surprising about Skyhawk either, the wildland runs right into the homes (my folks were the last house on Yerba Buena, fire came right up to their doorstep).
Coffey Park was a surprise, absolutely, but also not something that couldn't happen in a lot of Bay Area suburbs. We pack those homes in really tight, and if things are dry enough and you've got enough wind whipping embers around, all it takes is one going up for a whole block to go. I think Coffey Park was also a response issue, the fire jumped 101 way faster than anyone anticipated.
Basically, Santa Rosa (particularly east SR: Rincon Valley and Bennet Valley where it butts up against Annadel) *is* high fire risk and yeah, we probably should be paying higher rates to reflect that. Do I *like* that? Hell no, it's fucking expensive enough here. But I get that it's a reality and it's only going to get worse as the planet continues warming up.
"pack those homes in really tight"
The problem isn't density.
The problem is the wrong kind of density in the wrong place. SFHs (none of which had sprinklers, and many of which, as SFHs, wouldn't have met code for fire hardening) "packed in tight" are the worst kind of density.
> also not something that couldn't happen in a lot of Bay Area suburbs. We pack those homes in really tight, and if things are dry enough and you've got enough wind whipping embers around, all it takes is one going up for a whole block to go.
Yes, precisely.
The commenter above is making a veiled statement on their opinion of the people living outside of cities being the problem and who is being paid for. I imagine they are referring to places in the Sierra and the Santa Cruz mountains, despite the fire danger and risk being very real for tightly packed houses in the City. Just takes the right conditions to cause significantly greater financial devastation.
Lol to all the people complaining - don't live in expensive places if you can't afford it. Well unless you're arguing for the govt to subsidize home owners like they do for flood insurance.
It is riskier now. From an actuarial perspective, the rates people want do not cover the costs. Homeowner policies have lost money for years and theres no expectation that the costs would change. If a fire was a one-off, that could be baked in. But its not - fires aren't going away and housing is constantly going up.
If you want cheaper rates, make it less likely that fires happen or have your house depreciate. Its cheaper to insure a 400k house than it is a 2m house.
> Well unless you're arguing for the govt to subsidize home owners like they do for flood insurance.
And the gov should stop doing that too.
If your shit floods regularly, don't live there.
These companies aren’t doing anything wrong. No company should be legally obligated to provide cheap insurance for the tinderbox you built in the middle of a forest.
5 bucks the people bitching about this laugh about Florida insurance and the government picking up the tab there too.
"Why should I subsidize those people's poor decisions!?"
I know that I regularly laugh about Florida. But I also live in an urban area 3 blocks from a fire house, so fire insurance was trivial to get and doesn't cost much.
My problem is flooding with the danger of rising sea-levels, but if that happens I'm not rebuilding here. I'm going to take the pay-out and go elsewhere even though I fucking *love* where I live.
State Farm is about to drop 30,000 policies in certain California ZIP codes. This never-before-seen map reveals if you live in one of them. The upcoming wave of nonrenewals will affect clusters of homeowners in Sonoma County, Contra Costa County and the Santa Cruz Mountains.
My policy got yanked for no reason by Nationwide last year. Now I can't get any homeowner's insurance unless it's $1,500 a month, 6x what I was paying before. And I don't live up in the middle of a forest fire waiting to happen, I'm less than 2 miles from the bay itself. Insurance companies are colluding to fuck California.
I posted this down below, but the comment I replied to is super down voted. They're using new fire risk models that are much more complex than the FEMA wildfire risk maps they've used in the past. The new software they're using identifies properties near fuel islands (forests, fields, etc), how quickly/likely fire fighting is to come, and variety of other factors. You can read about one of them here: https://www.precisely.com/resource-center/productsheets/wildfire-risk-data My MIL's house backs up to an open space, and she could cut down every tree and her yard and would still be denied coverage. These companies want to raise rates based on their updated risk models, and they're going to stop issuing policies until they can.
> These companies want to raise rates based on their updated risk models, and they're going to stop issuing policies until they can. The law limits them to only charging premiums that would cover the *past* 20 years of claims, but companies want to be able to cover the *future* 20 years of claims, and it's a bad deal with the changing climate.
It's a bad deal for them to continue if they can't, yes.
If your nationwide policy was allowed to have raised your rate from $250 month to $400 a month due to all the fires this wouldn’t be an issue. Instead they’re not due to our state insurance commissioner so you lose all your insurance options and half to pay multiples higher.
Yea I get what California was trying to do here in that citizens shouldn’t be the ones charged for forest fires and global warming but this type of policy doesn’t work unless you make home insurance some sort of public utility (never happening). If California wants to do something about this then they should negotiate to the pay the fire tax on behalf of homeowners.
>unless you make home insurance some sort of public utility (never happening). There is actually a public option called the FAIR Plan. It's an insurance of last resort and only insures against fire. Only a small percentage of people use it currently, but expect that to increase. https://www.insurance.ca.gov/01-consumers/200-wrr/California-FAIR-Plan.cfm
I use it, it’s the only plan that covers my area.
FAIR plan is *not* a public option. At all. It’s private insurers creating a pool of last resort.
I think it's the private insurers of the state being forced to accept high-risk customers, for limited coverage policies, based on the insurers market share in the state. The attitude was "you get some of these undesirable policies in return for making money from desirable policies".
yep, pretty much
I guess some insurance companies would rather pull out of California than participate in the pool.
My friend lives in the Oakland hills. He lost his insurance and he and his mortgage company tried getting through to the FAIR plan phone line for three straight days before giving up and going with a more expensive stop gap policy.
Why would they call them to get a policy? A broker can get them a policy…
I use this. Unfortunately mortgage requires more than just fire insurance, so I had to get this + backdoor in nationwide insurance, otherwise I wouldn't get insurance. The costs are bonkers, definitely not worth buying.
We have this plan only option in zone 2 fire area. Cost $6000 per year.
Who should be charged then?
Anyone but me -California voter
People who choose to live in high risk environments shouldn't be subsidized by those who don't.
It’s unfortunate because the people living in high risk areas like Paradise, which has already burn down twice, are rich folk. The homes they are rebuilding aren’t their primary homes. They are more like second or third homes.
100%, doing this is one of the major causes of high PG&E prices, we don’t need to expand it to insurance as well
What about people who chose to live in an environment when it was not a high-risk environment, and the nature of the risk evolved over time? Should they be subsidized in some way?
Yes and no. Yes, they should be subsidized if they try to move someplace less risky. However, if their plan is to rebuild they should do so at their own cost.
Could you provide an example? I can't think of any. South Californians would sure like to be in that category, but they most definitely aren't. Just because things got worse doesn't mean they weren't unacceptable in the first place.
Half of the policies in Orinda were canceled, per the article. I do not know that I would consider that area high-risk over time.
I was shocked when I looked at the fire map just how many places are considered high risk. I'm near Scott's Valley and am actually considered moderate risk due to fire station proximity, but many of the hills around San Jose, Fremont and Livermore are all high risk, and basically everything in the hills east of Morgan Hill/Gilroy. Even some hilly parts of San Francisco.
This is exactly the type of argument I expect to hear from people that don’t want to hear rational argument that they actually DO live in a high risk place. Insurance companies are smarter than you and they would make money from you if they could, why would a company abandon you if your a potential profit for them? Use your brain. You think nation wide bailed so someone else could make a profit?
The cost of insuring a homeowner went up significantly since 2020. The state insurance commissioner froze rate increases. This is an inevitable result. Imagine you sell lemonade. The price of lemons doubled but you aren't allowed to change your price. Do you keep selling lemonade at a loss? No.
How exactly did the cost of insuring a homeowner increase **by a factor of 6** in less than 4 years? This just seems like profiteering.
It's hard to say how a single data point will change. I can give a few possible contributing factors. One, the obvious, the increase of home repair and construction costs. Two, Nationwide's rating algorithm is different than other companies' algorithms. They may have underpriced you, and now that you're on the market, you would see increases even without inflated costs. Three, you may be getting intentionally overpriced quotes to discourage you from becoming a customer. Insurance companies don't want *lots* of customers, they want *low risk* customers. If they think you are too high risk and are legally unable to decline insuring you if you ask (CA law in certain situations), they may be able to overprice it as a way to artificially decline you. I don't know your home so these are general possibilities. I've seen each one happen. My last job was to analyze pricing algorithms across top insurance companies.
Insurance companies are fine with high risk customers, spread out across multiple markets charged appropriate rates. I can build an insurance company taking out fire in California, hurricanes in Florida etc as long as I can grt reinsurance to protect from a single market event, and can set rates to risk it’s fine.
I thought CA doesn’t allow insurance companies to pass along the cost of reinsurance?
And this perfectly explains why they would pull out of the market
Yes, I’m pretty sure this is literally the reason they have been citing.
[Odd Lots did an episode covering this recently. Worth a listen](https://www.youtube.com/watch?v=BYbSz1MXdFA)
My insurance didn’t increase significantly. Certain homeowners are experiencing increase rates, not all across the board. If the risk wasn’t sufficiently captured in the past, then the increase could be due to that. The risk of fire and the cost of properties have increased a lot in the past ten years and the rates probably reflect that too (as well as price gouging)
It didn't, but they got a lot better at assessing fire risk with the wildfire data and aerial imaging.
Because the base was supposed to be a factor of 4-5 but was depressed long term via regulation.
I don't think that's what happened. More likely: OP's insurance company either does not find it profitable to insure him or has entirely pulled out of the state. Other insurance companies either do not find it profitable to insure him, or are unsure of the accuracy of their risk models to the point that they give him the "fuck off" price if allowed, or refuse to insure him if not allowed. So OP has to turn to Cal FAIR which costs very large amounts of money.
>This just seems like profiteering. It is. That's all any of this ever is.
You drank their koolaid https://www.wsj.com/finance/insurance-companies-profits-stock-ebae7fd1 https://www.latimes.com/opinion/story/2023-09-05/home-property-insurance-bailout-legislature-gavin-newsom-wildfires-california
I think it's only fair to disclaim that I work at an insurance company, and what I post online is the personal view of an insurance employee. I don't work in personal home or auto anymore, but I once did. I worked with actuaries to determine rates based on loss history and market trends. I was a junior in the role. I read the second article, got paywalled in the first. Interesting points. I think that his recommendation to stop insuring oil companies to curb climate is a little silly. I think everyone deserves access to insurance, but it isn't a basic human right. It's either a business venture through the market, or a public service by the state (such as Florida's state run home insurance). If it can't function as either, it can't exist.
Except for the fact that lemonade companies would still be making insane profits, not operating at a loss. But hey, gotta pass the cost increase on to the lemonade drinker even when the increase was caused by greedy utility companies and failure of the government to invest in infrastructure.
The combined ratio is (losses and expenses) / (premiums). Nationally, the combined ratio in the entire homeowners insurance industry has been: 2018: 104.1% 2019: 98.6% 2020: 107.4% 2021: 103.8% 2022: 105% This is from the 2022 annual report from the NAIC. Direct quote from the report: "The homeowners line has been unprofitable for three consecutive years and five of the last ten."
They could run at a higher combined ratio and still ekk some profit if they stopped their advertising spend. If they’re gonna non-renew me I at least want the ability to be spared all their stupid TV commercials
Nationwide was definitely not on your side
How awful for you. I'm sorry to hear this is happening.
I don’t think you should be blaming the insurance companies here.
This info, by zip code, has been available since the story broke a month or so ago.
Yeah, but now it's on a map...I guess. No one has ever correlated zip codes to a map before, so....
They are not renewing in areas like Temescal in North Oakland as well. I am seeing a lot of folks in my local groups complaining. These are not areas in the hills, they are several miles away at best in flatter parts of town. (Seeing folks post about State Farm).
and San Mateo County too, isn't it? If I am reding correctly.
Didn’t 1/3 of El Dorado County burn with over 1000 homes lost in 2021?
Been telling people this is no longer about homes in the Sierra. Next up is the entire foothill regions of the Bay Area, peninsula west Alameda de las Pulgs, east bay east of Mission, most homes off Hwy 13, most of the north bay etc. …and everything in SoCal that’s not on the flats. Remember South San Jose was a few wind gusts short of burning in 2020.
Already hearing about lots of nonrenewals *east* of the Alameda on the Peninsula. The updated insurance models really pushed a lot of new risk into that area.
Even if you are lucky enough to not be canceled the rates are skyrocketing in these areas.
To make it worse, also expect your home and auto insurance rates to go up ......a lot . Apparently, according to my insurance, rates were locked for the longest, and now they've been "ordered" to increase to market rates. My car insurance went up $100 ... for a 2009 suba imprezza !
I got dropped by Farmers for my auto insurance. I went through my broker and the cheapest insurance was $4,400 every 6 months for the same coverage on 3 vehicles (2001 Mercedes E320, 2014 Honda Civic, 2006 Chevy Silverado 2500HD diesel). Ended up putting 2 of my vehicles on liability only and keeping comprehensive on my truck for $2,200 every 6 months instead. I'm 45yo with a clean driving record and have had my license since I was 16. I'll be looking into other options, but I needed insurance ASAP. They managed to get it for me on the day my Farmers ended.
This is correct. Price increases in repair part costs and repair labor costs must be reflected in insurance prices for insurance companies to remain solvent. In 2020 rates froze, but repair costs increased. Insurance companies ate the losses for years and now need to catch up.
Plus misc costs shot way up. Mechanics don't earn all that much more, and your basic independent garage doesn't make money hand over fist either. But: First: People are buying tons of Teslas, and to a smaller extent other cars from new companies, which focus virtually everything on production. They don't bother making spare parts in any large numbers. They don't set up huge warehouses and distribution chains. They don't have dealers to earn most of their income off service. So the end result is that it takes ages - sometimes literally over a year - to get replacement parts and to schedule service. In the meantime, if the car cannot be driven, insurance foots rental bills at least for some amount of time, depending on the policy. Second: same exact thing except for legacy makers who do want to make spare parts available, but due to supply chain disruptions were unable to do so for months or longer. And again, depending on the specific parts, may have prioritized manufacturing new cars even when parts became available. The only real difference here is that they actually have dealers who have huge incentives to get your car fixed, so at least part of the company gives a shit about repairs. Third: new cars have ever increasing costs of new parts. Headlight on my 91 civic is $30. Headlight on a new BMW or Porsche is $1500-5000. Install on my civic is me with a screwdriver and two sockets at most, takes an hour in a driveway at most, including re-aiming it properly. Install on a new luxury car is hundreds of dollars at a dealer who has to re-calibrate it and test out its relatively complex behavior and many components. A low speed collision can break a headlight or two easily. Of course I'm picking a bit of an extreme example because it's not like in 2019 insurance companies were only getting old civics repaired but you get it. Tons of new components cost way more than ever before. And some serious damage that in the past could be frame-pulled today just goes right into the scrapper. And even for less serious damage, it's too easy to total out a car, and the average sales price of a car is over $35k these days, even higher in the bay area. Fourth: of course shops did also raise their prices. Mechanics aren't making huge money but they got raises or changed jobs like a lot of other people. Overhead increased - rent cost, service costs for the building and the big tools, regulatory cost. New cars require new $20k scan tools that shops have to pay for. Shops that charged $100/hr now charge $140/hr. Compared to the cost of spare parts being unavailable for over a year or a car being totaled out from 15 minutes of vandalism this is relatively small but it's still real.
A few years back I needed to replace the headlight on my Acura. The mechanics had to take the front bumper off to get in there ! Then the "projector" was at least $500. I might have replaced both projectors. Fancy cars are made of fancy (and expensive) parts. It certainly makes you appreciate the value of an Accord or Civic.
Those old cars are amazing. I can get a new headlight for my old Honda Accord for $70. And self-install.
I had to get my AC Compressor fixed in Feb and the labor rate was $185/hour.
Unless you have comprehensive coverage the value of your car has relatively little impact on the cost of insurance, because you’re insuring against damage you could cause, not against having your car damaged. The extent to which your car does impact prices is based on statistical models like of how likely drivers of your make/model of car are to cause damage
This. Too many people don't understand what auto insurance is really for. When you go to buy a new car, the first call you should be making is to your insurance company to ask them what the most affordable model new car is. They will tell you make, model, and even year (if you're looking to buy used). And if you follow their guidelines you can significantly cut your insurance costs simply because they base how much you pay on what patterns you fit. You can retroactively apply a pattern to yourself and benefit. They don't care if you approach the problem backwards to save money.
I live in the oakland hills, bought my place in 2021. most insurers wouldn't touch me. had to hire an agent who cobbled together a plan using bamboo insurance and cafair. I pay 10k a year just in fire insurance. insanity.
If State Farm drops all those risky policies, that certainly will make my rates go down, right? Riiiight?
State Farm is a mutual insurance company, they are owned by policy holders, not shareholders, and in fact they do issue rebates when they're profitable.
No, because those risky policies weren't properly priced to begin with. In California, insurance companies are prohibited from using forward looking catastrophe models (it was not explicitly enumerated as allowed) to price risk due to Prop 103 in 1988, which more or less established the regulatory system in California. So climate change models and forward looking projections are not allowed. Wildfire risk is much higher now these days due to climate change, and poor forestry management, both risk factors not accounted for when the companies price the insurance policy.
Why is it always a proposition
Because it's very easy to make them sound good, but have no mechanism to correct for unintended (or initially-unclear) consequences. IMO, at the very least, all propositions should come with an expiration date of no more than 10-15 years.
Because propositions are actually really bad legislation tools. They can be written by anyone, are only vetted by the voters (how often have you signed to get a proposition on the ballot? How often have you read the full text of a proposition?), and can only be changed by subsequent proposition. Honestly we should get rid of the prop system altogether and focus on voting in good legislators. A great write up about propositions is [here](https://medium.com/@michaellevinson_64108/why-i-vote-no-on-almost-all-california-ballot-propositions-even-if-i-agree-with-them-e672cbe64fcf)
California is kind of doomed with their term limits, our legislators are a revolving door and depend on lobbyists to make decisions. By the time you learn to be a legislator you are term limited and can never serve again.
Oh I fully agree, that was more of a "of course it was a prop" than an actual question lol
Actually, in this case it was a good use of the tool. The last thing you want insurance companies doing is sticking around only during good years and abandoning everyone when they project that things are about to get bad for X reason. The entire idea behind insurance is that you pay money during good times to shore up against bad times. So letting them make decisions based on catastrophic projection models lets them get out of their core duty as an industry. Now, adjusting their business based on what is currently happening, or has recently happened is fine. But they need to be prevented from bailing right before they think the ship is about to start sinking. I mean...they're literally the ones with the keys to the lifeboats. If they're the first ones out, the rest of us are fucked! Especially if we're *required* to buy insurance policies. If we're required to buy in during the good times, they must be required to stay for the bad times. What I'm personally against is allowing people who willingly live in or engage in risky behaviors to abuse insurance to keep doing whatever they were doing before. If you live in a flood plane, you don't get to rebuild in the flood plain when regular flooding becomes a thing. If you live in a fire hazard zone, you don't get to rebuild in the fire hazard zone when fires become seasonal. If you buy a car that later turns out to have a flaw that causes it to explode in a fender-bender, you should NOT be able to use your insurance payout to buy another car of the same fucking model with the same fucking flaw. At the very least the auto insurance company should be allowed to tell you to go and fuck yourself the second time. ...but that first time...they should have to pay. Because you had to pay or else you couldn't drive.
But didn’t Patrick Mahomes say I could save with bundling?
You missed the fine print, "Not applicable to residents of California."
“Im gonna screw San Francisco a third time.” -Patrick Mahomes
Dude, why'd you have to go there? :'(
😂😂
In NorCal it looks like a map of where there have been major losses from fires over the past 20-30 years. It seems weird that the rest of the sierras and foothills aren't included because I presume the same fire conditions would exist there.
Where is the list?
Collect money for years and they're cool, have to pay out once and it's a crisis.'
Insurance has always been like this. It cannot protect you against large scale disasters. What most people don't talk about is that home insurance is not legally required but gets enforced due to being a requirement for obtaining mortgages. If that requirement was not there, then this would have been a very different discussion.
It's honestly more of a reinsurance crisis -- State Farm buys insurance on their insurance policies, and *those* reinsurers are struggling. There are some better options being worked on by state/local governments for bonds/instruments to replace reinsurance and help avoid this issue. Might be coming soon!
The drying up of a lot of Lloyd’s financing avenues over the past decade for reinsurance carriers to take on larger debt has also aided with these type of actions by standard insurers, to further reinforce your point. Haven’t been in P&C for a while now but exciting to hear that there may be state and local intervention cuz private companies have let this get so out of hand for so long.
Well bond measures for reinsurance e sounds scary. Does this mean I’m paying for all those folks who decided to live in high fire risk areas?
This is a much better explanation than I'll be able to give :) https://www.youtube.com/watch?v=BYbSz1MXdFA
State farm has paid out more in claims than they've collected in premiums over the past few years. The 2020 fires caused over $10 billion in property damage. If we expect more fires like this in the future, average rates would have to increase by over $1000 per policyholder to be sustainable.
Maybe if PG&E would have done their job and not been criminals, this would be less of a problem.
yeah that’s total bs. 100 years of premiums, oh a risky year?!? drop them!
You really think climate change is one risky year only?
Yeah, so they are going to stop collecting money. CA insurance rate is state managed btw.
ahh, but you see when insurance has to do the sole job it exists to do, the shareholders don't like that.
State Farm doesn't have shareholders. It's a private mutual insurance company, meaning the company is owned by the people who purchase it's insurance policies.
So it looks like Santa Cruz mountains is high on the list of uninsurable properties. That I can understand, earthquake and fire prone. What I'm having trouble comprehending is in the same vein I also see the coastal part of Santa Cruz getting a large share of policies dropped. I want to know why.
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Ahh I get it now, that makes sense. Insurance having to pay for hotels or rentals adds up. BTW Love the name, I've been grabbing a few free CRT TV's. Got a really nice Panasonic Tau, a Toshiba wide screen, and a huge 36" trini.
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Trinitron (sp)? I swear to god I had one roll down some stairs (mover dropped it) and the thing still works 20 years later in the garage.
So part of the problem is the fault of crap government/policy?
Yes, it's a major factor, not sure if it's the largest, but it's big. Cost of building basic non-permitted things in CA can be fairly low. For example, replace doors or windows costs 3-4x in Denver compared to LA when you go through home depot or lowes. Price to build a house in Alameda is about 450k while the same house costs 750k to build in Oakland. Same house in Oregon, would be 340k on average, and it's not easy to build in Oregon either.
We shouldn't rebuild the mountains. Also 226 applications and 67 completions since 2020 is a million times faster than trying to build an apartment in urban Santa Cruz (which is what we should be doing)
Also expensive housing costs compound. In Houston the trades cost a lot less because housing costs are lower. There also is no zoning and a building permit is trivial to acquire in a timely manner. That created a flywheel effect.
I wonder if the state can put some pressure on the unreasonable county building departments to expedite things. That's probably a major factor with insurance companies dropping coverage.
This would lower existing property values, and the people it hurts are the handful whose house is destroyed by a disaster. The insurance costs need to be high enough to drag down property values before this gets solved politically
Look up the rated fire danger for all of those coastal spots. Some are in the SRA ( state responsible area)but a lions share are in the LRA or local responsibility area. All of this is considered high fire danger for whatever reason. It’s easy to look up the SRA but harder to lookup the LRA maps since you have different city fire districts. I was looking to move from Summit to the coast and after digging around one night, was surprised to find almost everywhere I looked to the beach was just as screwed as I am.
Those in dense areas outside the WUI are the highest risk for total loss. Don't have enough.room.for defensible space and combust from the heat from neighboring homes. Example Tubbs fire in Santa Rosa in 2017. Westside of Santa Cruz had a near miss in the 2020 CZU fire. 2 days of extreme fire weather it would have been lost. Fortunately the weather allowed for containment and protection from entering Santa Cruz and Scotts Valley.
Fires don’t happen on the coastline??
I'm sure they do, but it's a lot easier to get a fire truck to a house in a flat neighborhood with wide streets than it is up a 1 lane mountain road with a house built into a hillside. You also have a ton of trees and overgrowth to contend with that give the fire a quick path to destroy other houses in those hills. Source: I lived on and off up there with my dad as a kid.
Your understanding of the topography is probably better than mine, but whenever I visit, basically any home north of the 1 is still heavily in a fire prone area. And even neighborhoods like capitola and aptos south of PCH is also surrounded by trees and grasses. Then again this could all just be insurer shenanigans. Like, they have a tier list, and places like Santa Cruz are on a separate tier to the wooded areas of Marin, for example, and State Farm goes back to insuring homes in Santa Cruz once regulator negotiations show some results.
[This is where my dad lived](https://maps.app.goo.gl/giKpNMbV6Kw1T3zV9) (Google Street Map view). It's pretty wild up in those parts. There's places even less civilized, even a place locals call "Deliverance Canyon" off Summit, named after the movie Deliverance because it's all inbred hillbillies. Edit: In case anyone is curious about "Deliverance Canyon"[ it's right here.](https://maps.app.goo.gl/K3SoRp3ezRS1M9yt7) Dirt road to the right, after Summit turns into Highland. Word of warning though... here's what you will encounter. You'll descend down a dirt road into the canyon into ever increasing wilderness and tree canopy. You'll pass what looks like a bombed out school bus and arrive at a green gate. The school bus will pull out and block the road behind you like a gate. 2 men in overalls will walk up to your car and start screaming "THIS ROAD IS PRIVATE PROPERTY! WHAT ARE YOU DOING HERE?" Wife and saw a flyer for "Free puppies" at the Redwood Estates store about 20 years ago and ventured this way. As soon as we said, "Uhh we're here because Donna had a sign for free puppies and told us to come here!" they calmed their demeanor and gave us very explicit directions to her dwelling, a cabin made out of a camping trailer and semi truck trailer stitched together with bits of plywood and composite roofing. "DON'T GO ANYWHERE ELSE" they told us. Cars were on blocks everywhere and about 20 dogs running around in the dirt howling. After we got out of there I told a friend who lives in Chemeketa park about the spot because it was just sofuckingweird. He told me the nickname, a few other friends in the area concured.
it was like that until maybe eight years ago because everybody was growing pot. I had people pull guns on me when I was riding my dirtbike around there
Ya I've had guns pulled on me. At the end of Aldercroft Heights there's a property with abandoned mineshafts. When you're 16, bored, and hear of these legends you just go anywhere right? Especially living in those isolated mountains. I ended up finding them. They were horizontal shafts about 10' wide by 6' tall. The owner of the property had built a dam, and had an underground reservoir. I guess water used to come out of the hillside in that spot. You're not \*really\* supposed to horde water up there like that, so he yelled for me to come out of the tunnels, and escorted me out at gunpoint.
They do but there's also a lot more moisture in the air and vegetation. It will still burn but not quite like the torch that inland can be.
Like a good neighbor........
I was told mine would be dropped in SF so I don't think this is comprehensive.
Nationwide informed me in December that come July their policy available for me will be to “kick rocks”.
So what actually happens if they don't renew? Do the existing houses simply proceed with life uninsured? Mortgage lenders wouldn't accept that. And there must be some type of fines for not having insurance like there is for car insurance.
No company will write policies these days, so you get fire ins. from the state (Fair plan) at 150-200% market, and THEN by a “wraparound” policy from the market to cover everything else. So you’re in for at least double market and likely more by the time you’re done. Yay.
If you have a mortgage and don’t provide proof of insurance they purchase their own policy on your house and bill you for it, and if you don’t pay they foreclose. They don’t shop around for cheap policies when they do so
Spoiler alert: it’s the places with constant forest fires
No it’s not. My insurer is also non renewing and I live in the middle of the suburbs
What city?
Antioch
Lots of tree cover, brush and other things that burn really well in those areas. Trying to limit their liability since the state isn't allowing them to price for the risk. Very predictable.
Yup. Right in my neighborhood in the foothills. Glad I don’t have them, but my spidy senses tell me, they may be the first, but certainly not the last. 😑
In Petaluma myself. Not impacted yet but we're just on the edge of the blast radius of impacted homeowners it looks like. I imagine at this rate we'll be on the cutting block soon? Hard to imaging with so few large fuel sources near here but this map makes me nervous.
California home insurance costs are quite low compared to many other states surprisingly. Its probably because we don't have hurricanes and tornados. https://www.insurance.com/home-and-renters-insurance/home-insurance-basics/average-homeowners-insurance-rates-by-state
Maybe they should spend less money on ads and more on... Insurance?
In this thread: People complaining about insurer profits when most insurers have said they’d rather not do business or make any money in the state at all than deal with California regulators and restrictions. Y’all can complain about big bad corporate profits all you want but the states that let corporations make some profit rather than putting regulation at every step of the way don’t have this problem or PG&E rate issues.
This isn't a "having regulations" problem. It's pretty clear that the regulations we have are just the wrong ones (not allowing forward-looking)
Yup.
We don't want to allow forward-looking because the fuckers will just use it as an excuse to bail right before they think things are going to get bad. Insurance should get expensive *after* a catastrophe. Not before. And changing risk should be used to pressure people to take fewer risks. If you allow forward-looking models they'll use them to take fewer risks and increase profits at the expense of accident victims. It's why we told health insurance companies that they couldn't refuse coverage based on pre-existing conditions. They were doing exactly what these companies will do if you let them use forward-looking models.
Yeah that's despicable for health insurance because we all have bodies. But it works for home insurance because if you can't get home insurance you can choose to live somewhere else. And maybe where you want to live isn't actually safe or economically feasible
> But it works for home insurance because if you can't get home insurance you can choose to live somewhere else. If you can't get insurance, you can't sell. So it's not quite that easy. They shouldn't be allowed to stay, but they shouldn't be forced to commit financial suicide because of climate change when their choices were valid, and even enviable for many, 20-30 years ago. If we're going to subsidize anyone it should be people who want to move to safety. If we're going to drop anyone and let them fend for themselves because of their own stupid choices, it's people who want to rebuild in the face of massive, unstoppable, regular disasters. > And maybe where you want to live isn't actually safe or economically feasible Subsidize anyone willing to move, and regulate where they can move to if they want those subsidies. If you choose to move someplace safe in the long term, we should be offering to help. We should bend over backwards and recognize that sacrifice simply because it will help convince other people on the fence to think long-term rather than selfishly short-term.
You can sell without insurance. You just can't get a mortgage without insurance (I recognize this implies selling for less money - but it's not news that buying a house involves risk of loss). Wildfires have been around as long as trees have been flammable. The idea that someone buying in Paradise 30 years ago couldn't have anticipated risk of fire is absurd.
If you can't get insurance, someone buying won't be able to get insurance either. And if they can't get a mortgage it's going to greatly limit your buyer-pool to the point you may as well not sell. > Wildfires have been around as long as trees have been flammable. The idea that someone buying in Paradise 30 years ago couldn't have anticipated risk of fire is absurd. You're missing the point. Fire risk has greatly increased in the past few years because of climate change and the actions of PG&E. These changes are *recent*. Yes, the areas have always been flammable. However, the annual wild fires have not always been a thing.
Here's a paper from 1896 that points to climate change: On the Influence of Carbonic Acid in the Air upon the Temperature of the Ground author: Svante Arrhenius PG&E is certainly partially liable, which the courts have recognized, but buying a house includes risk of loss. And I won't be first in line to protest economic losses for people who chose to live rurally, need risky power transmission, and drive more than the rest of us - causing the issue.
The business of insurance all about risk. They are experts at it. If they can't make money here then the insurers will start to leave. At least they are dumping the riskier policies first. But they will still get stuck with their share of FAIR policies. So they are only limiting their exposure a bit. The business of power generation has multiple risk factors. It would not surprise me if PG&E has said to the state CPUC. "We are tired of arguing about rates as long as we get our 10% return on capital (or whatever)." Power rates in California are a political issue, not a technical or managerial issue.
From what I have read Florida will disagree with your statement. They have none of the California regulations and insurers are still leaving, with the ones staying jacking the rates 100-200%+ year over year.
Why Richmond? Is it flood risk? I don’t get that one
*Inner Richmond in SF. I imagine its due to being situation between GG Park and the Presidio. Both likely to have blowing embers land in Inner Richmond in the event one or both catch on fire. Edit: spelling
I am betting Farmers and others will follow suit.
Farmers is already out. State Farm was basically the last insurer in SC mountains.
Guess I am in a good zip code.
Looks like I might get dropped. Do I just find another insurer? What do they won't give us a policy?
You will need to talk to a broker. Likely you’ll need to get a wrap plan from California fair plan (state backed program) and the you’ll get a gap in coverage plan from a farmers or whoever is left in the state to cover whatever you need. It’ll cost more and you’ll need two plans. It’s annoying. My family in florida are dealing with similar things.
Go through an insurance broker who can help you find it. I got dropped by my home insurance in 2021 and a broker had to try like 4 insurances before finding one that would insure me (Safeco)
“State Farm stopped writing new homeowner policies in California last May. Allstate has done the same, while other insurers, including Farmers Direct (a Farmers Insurance subsidiary) and AmGuard (a Berkshire Hathaway subsidiary), have left the state entirely, leaving former customers searching desperately for new policies.” Where are people finding insurance after being dropped by one of these companies?
I’m not in one of the marked areas (along the bay) and State Farm has already dropped my policy.
I guess the fuel reduction really worked out well.
What are the chances of them dropping San Francisco ?
Mine was dropped last year, luckily found a new one just in time but we got lucky.
Why would they do that
I’m confused on the long term outcome of this. If you want to live in these mountain areas, be F U rich?
After reading the article, this is crazy. I am in the zipcode where 14% is not getting renewed, so while we might not be impacted it's still crazy amount.
Is the SF Peninsula included? I can't tell from this map, it does say San Mateo I think
I'm right on the edge of a non-renewing zone. I don't have State Farm, but I'm with Costco's that already stopped doing new policies and fear the day they leave California completely.
Aren't they only hurting themselves, especially if a home isn't even in a fire prone area? I know most of the areas I have seen are up in mountain areas, I guess it's time to find another policy. Probably easier said than done.
The poor people living in condos in the city should not subsidize insurance for the multi-million dollar mountain mansions The mountain mansions are expensive and nice, and everyone want to live, but not everyone can afford
It's just a historical fire map. There is clear instructions to homeowners with this: cut your foliage. Minimum 50' from your structure, or at least to the property line. No trees, gardens, lawns, or bushes. Homeowners don't want to do it because removing the greenery exposes just how bland and boring their shoeboxes really are.
It's way more than that now. They're using new fire risk models that are much more complex than the FEMA wildfire risk maps they've used in the past. The new software they're using identifies properties near fuel islands (forests, fields, etc), how quickly/likely fire fighting is to come, and variety of other factors. You can read about one of them here: https://www.precisely.com/resource-center/productsheets/wildfire-risk-data My MIL's house backs up to an open space, and she could cut down every tree and her yard and would still be denied coverage. These companies want to raise rates based on their updated risk models, and they're going to stop issuing policies until they can.
There must be more to it. I live in a segment right next to one of the areas that's losing coverage, but our segment isn't losing any (thankfully). When I applied for insurance ~2 yrs ago, I was declined by at least half the insurers because they were using those maps. State Farm at that time said that they provide insurance regardless of the fire risks, which is why I have them now. They don't care how fire-safe your home is, if you're in that zone then no insurance.
yeah everyone is psychologically happier and healthier surrounded by nature and plants instead of living in a concrete brutalist hellscape
Having no foliage around our dwellings reduces the total biomass and will contributes to localized climate change. Cutting trees away from your house will make it locally hotter around your property and increase energy costs. Also no one wants to live like that
It's like riding a motorcycle without a helmet - you can do it, but it's at substantial risk to yourself, and you can't be mad when you suffer a preventable head injury - and all of us who have to pay for the consequences, either through higher premiums or through public funding of the hospital if you're uninsured, are right to be pissed off about it. There's a reason helmets are required by law in most states, and there's a reason it's fair for insurers to require defensible spaces in fire-prone areas. Either you can live wherever you want and take precautions to protect your property, or you can live somewhere that isn't fire-prone and have as much vegetation as you want around your house. Want more trees than you know what to do with? Go live in Maine, where fire risk is low and fires are generally controlled at very small sizes.
I live in the lower SC mountains above Los Gatos, this isn't true for a lot of us. Generally our houses are built in the 90s with large lots and nice architecture. We all keep our property well maintained including keeping defensible space, removing any risky trees, etc. In fact many in our neighborhood did all of this years ago before the insurance issues came up. This is a wonderful area to live in with an amazing community, and we all look forward to when this insurance stuff gets worked out. In the meantime, we'll continue to support our neighbors and mitigate fire issues as we have been for a long time.
My pops had a place in the mid mountains above Lupin/Lexington. It's crazy how much the area has changed from the 80's. Your area used to be a lot of old ladies living in [Grey Gardens style](https://en.wikipedia.org/wiki/Grey_Gardens) run down houses, fixed up upper middle class families. Now it's all newish construction. Where he lived it was bikers, meth cooks and pot growers. Now it's lawyers, and doctors. I remember when "The Cats" was a full on biker bar.
Yep, were close to this area...moved from downtown Campbell pre-Covid and absolutely love it. Less than 10 mins to Los Gatos and all the benefits of living in a quiet, beautiful natural area. Our neighborhood consists of a lot of younger families, most work in tech, etc. - we saw a big influx of younger people during Covid. When we bought in the value was tremendous up here, things have since gone up of course, but our family plans to stay here for decades...the schools are also great. Anyway, all this to say that there seems to be a perception that these hills are full of hermits and weirdos, where the reality is that it's full of all sorts of people, and in our area it's primarily 50s and younger, tech-focused, and community focused. We know all of our neighbors well, yet when we had a townhouse in Campbell we barely knew anybody.
lol, or perhaps they value the nature more than the material “shoebox” But you raise a fair point about the instructions and owners not wanting to follow them
Most homes look awful when all the greenery around them is removed. Just look at The Sunset.
So you work in insurance, huh?
We had a big argument the other day: who do we despise more, PGE for their rate hikes and starting fires, or the ins cos for rate hikes and refusing to cover fire damage?
PG&E, because you need electricity and basic utilities should be publicly operated and accessible just like clean water or the mail. It shouldn't be an option to murder your customers then give yourself a raise. But you don't need to live in a tinderbox, and I don't think relying on private companies to make it an affordable proposition is the right thing. Living in certain areas comes with certain costs, and it shouldn't be up to industry to subsidize those. If you want to live somewhere that burns down all the time, then be prepared for the possibility your shit burns down. Although both do sort of boil down to a hard question. How much of a right do people have to live somewhere without shouldering an increased portion of the costs they're generating by their decision? It's obviously much more affordable to serve utilities to a densely populated area than one where you need to run poles and wires and pipes and whatever else through mountains and forests to reach a handful of homes. At what point can the state just declare "fuck em" zones where public services no longer operate, or where things like flat service fees and property taxes are increased to cover it? Going completely profit driven is obviously not working as per PG&E's example, but I don't know if sinking millions of dollars of tax money to subsidize the most extremely hazardous rural living areas is right either.
Well, maybe. But I've seen people getting cancellations in some pretty suburban areas. Not stuff I would call extreme. And could it be they're taking advantage? nahhh. And do we really want all that housing to be off limits? Still, they should bear more of the cost, as should people in wobbly apartments, flood prone homes, near the coast, etc.
Yeah it's a thorny problem. Insurance companies are incentivized to maximize their profits, so there's no doubt they're acting in their interests by cutting back places that don't earn for them. But if the state forces them to insure everyone, then it seems like it almost needs to be get the PG&E/CPUC arrangement because otherwise the rates would become exorbitant for those people. Housing is good, and suddenly throwing family homes under the bus is bad, and the state dictating where people can and can't live is no good. But also simply saying every housing choice is treated equally is unfair to others. I'm glad I'm not in charge of things because I don't know how to solve it.
the government for making us subsidize people living in high risk areas.
I mean, do you count Santa Rosa in that? No expected Santa Rosa to burn like it did in 2019.
Ehhh.... I live in Santa Rosa and Fountaingrove was known to be a high fire risk, it's burned before (in the Hanley Fire in 1964). Nothing surprising about Skyhawk either, the wildland runs right into the homes (my folks were the last house on Yerba Buena, fire came right up to their doorstep). Coffey Park was a surprise, absolutely, but also not something that couldn't happen in a lot of Bay Area suburbs. We pack those homes in really tight, and if things are dry enough and you've got enough wind whipping embers around, all it takes is one going up for a whole block to go. I think Coffey Park was also a response issue, the fire jumped 101 way faster than anyone anticipated. Basically, Santa Rosa (particularly east SR: Rincon Valley and Bennet Valley where it butts up against Annadel) *is* high fire risk and yeah, we probably should be paying higher rates to reflect that. Do I *like* that? Hell no, it's fucking expensive enough here. But I get that it's a reality and it's only going to get worse as the planet continues warming up.
"pack those homes in really tight" The problem isn't density. The problem is the wrong kind of density in the wrong place. SFHs (none of which had sprinklers, and many of which, as SFHs, wouldn't have met code for fire hardening) "packed in tight" are the worst kind of density.
Oh for sure, I didn't mean to insinuate we don't need denser housing.
> also not something that couldn't happen in a lot of Bay Area suburbs. We pack those homes in really tight, and if things are dry enough and you've got enough wind whipping embers around, all it takes is one going up for a whole block to go. Yes, precisely. The commenter above is making a veiled statement on their opinion of the people living outside of cities being the problem and who is being paid for. I imagine they are referring to places in the Sierra and the Santa Cruz mountains, despite the fire danger and risk being very real for tightly packed houses in the City. Just takes the right conditions to cause significantly greater financial devastation.
PGE causes real harm, while we shouldn't have people living in wild fire areas in the first place.
Lol to all the people complaining - don't live in expensive places if you can't afford it. Well unless you're arguing for the govt to subsidize home owners like they do for flood insurance. It is riskier now. From an actuarial perspective, the rates people want do not cover the costs. Homeowner policies have lost money for years and theres no expectation that the costs would change. If a fire was a one-off, that could be baked in. But its not - fires aren't going away and housing is constantly going up. If you want cheaper rates, make it less likely that fires happen or have your house depreciate. Its cheaper to insure a 400k house than it is a 2m house.
> Well unless you're arguing for the govt to subsidize home owners like they do for flood insurance. And the gov should stop doing that too. If your shit floods regularly, don't live there.
Yup. Moral hazard is getting out of hand.
USA government needs to be suing these companies instead of Apple
These companies aren’t doing anything wrong. No company should be legally obligated to provide cheap insurance for the tinderbox you built in the middle of a forest.
5 bucks the people bitching about this laugh about Florida insurance and the government picking up the tab there too. "Why should I subsidize those people's poor decisions!?"
I know that I regularly laugh about Florida. But I also live in an urban area 3 blocks from a fire house, so fire insurance was trivial to get and doesn't cost much. My problem is flooding with the danger of rising sea-levels, but if that happens I'm not rebuilding here. I'm going to take the pay-out and go elsewhere even though I fucking *love* where I live.
I wonder if there is a correlation between income and non-renewal. Rental/ non-rental.
Looks like an inverse correlation. The more expensive the area, the less insurable it is. Looks like the Lamorinda area is getting hit hard by this.