I live in northern California. some of this may partially be due to red tape, bureaucracy and the current number 3 ranking as a 'judicial hellhole'
https://www.judicialhellholes.org/hellhole/2022-2023/califor...
https://www.judicialhellholes.org/hellhole/2022-2023/califor...
Of course, the judicial environment is separate from the regulatory apparatus, and it seems eminently plausible that CA courts are much more willing to protect consumers from bad faith claims practices, etc.
That all being said, catastrophic[1] wilfdire claims are a huge problem in the P&C insurance industry because they make the actuarial math much more difficult, and CA has had quite a few over the past couple years. Where I live in CO, none of the well-known insurers will, as a rule, write home policies in the mountain regions for similar reasons in spite of the relatively friendly regulatory environment.
[1] a term with a rather precise meaning in insurance, referring to a single event which causes a large number of expensive and highly correlated claims
The reaction when houses burn should be "should have built using fireproof materials" or "that happens when you live in a forest" not "here's billions of dollars from more-responsible people".
The adjustment in cost is simply facing the reality that more homes are burning nowadays. They pay for your flood insurance as much as you pay for their fire insurance, and their premiums are moving up faster than yours..
Today them, tomorrow you
You may have not seen what a forest fire, like those NorCal gets, does to a house. The insurance companies will have to pay just as much to replace a yard with some scorched brick in it where a family of four used to live, with their cars, possessions, appliances, etc. The house is ruined whether the walls survived the 1000 degree heat or not, because everything in and around it is lost.
Now there's certainly a class of old wooden houses on grasslands that are vulnerable to becoming infernos from stray sparks.
Assuming they weren't always that vulnerable (and that's what we're talking about here: new risk), I'm just not clear who would pay for it to be torn down and rebuild with (magical?) bricks. Did the homeowners have to do periodic risk assessments and decide when to do this? Who would pay for it? What's their motivation? They have insurance after all. They'll just rebuild.
If the insurance companies were caught off guard by this, how is a home owner to know and preemptively rebuild?
The purpose of insurance is to socialize losses. But if a few participants in the insurance pool engage in outsized risky behavior, that’s not fair to the rest of the pool that chose significantly less risky decisions.
https://www.capradio.org/articles/2021/06/23/newsom-misled-t....
By fueling 'climate change' anxieties the California supermajority and the monopoly power company PG&E mask their deadly incompetence with massive media spends, stoking fear and with the inevitable result of insurance being withdrawn and businesses leaving the state.
It's a shame there's no credible political opposition in the state, the infrastructure is crumbling, street dwelling drug tourist visitors are out of control, we are not on top of water storage during the heavy rain cycle years that occur every 5-7 years.
If you exclude everything in an area with those issues, there will be very little left to insure in California.
Labor is scarce, demand is high (wildfires), and materials are expensive. I know a few folks in the trades out here and one is constantly at his lake house, the other is constantly on vacation or touring with his band.
Price caps for insurance policies -> no insurance policies.
Multi year environmental study requirements -> no new construction.
Decriminalization of theft -> rampant theft.
Eviction moratorium -> rent inflation and 800+ credit score requirements.
There's enough of this make a small encyclopedia.
For example, a big part of why they ranked Pennsylvania as a top judicial hellhole is that the venue rules for medical malpractice lawsuits was changed from "must file in the county where the alleged injury occurred" to "can file where the alleged injury occurred, where the doctor lives, or where the provider operates a hospital or office".
Some reasons Georgia is #1 are a big verdict against Ford in a suit saying F-250s have weak roofs that greatly increase the danger in a roll over accidents and a state Supreme Court ruling allowing a lawsuit to proceed against Snapchat from an accident where someone going 107 mph (they were trying to generate a post using Snapchat's Speed Filter that would show over 100 mph).