California's largest home insurer won't renew 72,000 policies
sfchronicle.com
sfchronicle.com
https://insurify.com/homeowners-insurance/news/progressive-d...
https://www.pnj.com/story/money/2023/07/12/florida-insurance...
Citizen which is state backed makes you move to private if you get an offer thats <= 10% more expensive as they don't want people on government insurance.
I've often wondered about the whole roof bullshit as it seems everyone around here expects a free roof replacement anytime it hails. At some point it's unsustainable.
(The idea behind roof replacement insurance is/was a good one, as a damaged roof quickly destroys the entire building, water is the building destroyer. But when you have people driving around after a hailstorm offering homeowners free roofs if they sign over the ability to work with their insurance, obviously something is wrong.)
There was a lot of people getting new roofs for very minor damage and roofers going around trying to facilitate the process.
The key here, and what insurance companies really don't like dealing with, is coordinated payouts.
If you insure 10,000 homes, and 10 burn down every year, that's quite manageable. If instead you have years with nothing and then a thousand burn down at the same time, that's much harder to manage. It's also harder to build the actuarial tables, because there's too many unknowns.
And wildfires and earthquakes almost by definition affect large areas.
The state, of course, can be the reinsurance issuer of last resort if they really believe their numbers are correct. Or do something like the California Earthquake Authority which everyone knows is vastly underfunded, but at least there's the hint of a promise that when the Big One™ comes, they'll get emergency funding: https://www.earthquakeauthority.com
Step 2: use reinsurance to cover losses
Step 3: reinsurance premiums go up or reinsurer refuses to insure you
AIG anyone?
Around here they just write a roof exclusion if it's too old, and hail doesn't get you a "free roof".
There is something related to the sticky membrane they put down first now days that helps with hurricane damage and there was also a significant amount of people getting insurance to pay for new roofs after even minor storm damage that occurred due to the way the law was or is structured, roofer where going around finding anyone with minor damage and getting new roofs put on filing claims.
We had some tornadoes go through a few weeks ago. My house had some minor hail and 50-60 mph winds. No damage. Yet plenty of letters in the mail offering to handle getting me a new roof.
The difference is that Florida used to make it really easy to force the insurance company to pay even when nothing was wrong.
Florida building code has been improved over the years with features to resist shingle detachment, roof uplift, and speed drying of the roof after water ingress to prevent mold.
The base standards may have been raised:
* https://fortifiedhome.org/roof/
* https://www.youtube.com/results?search_query=fortified+roof
(Or, even if it's "good enough" for the building code, it is not good enough for the insurance companies.)
My insurance premiums (and to a huge degree now, taxes) shouldn't go to pay for people who keep rebuilding in a swamp that is routinely leveled by hurricanes. Especially not when those people not only don't believe in climate science but support elected officials who attempt to ban climate science from policy, education, etc.
Just because there's land somewhere doesn't mean society has to support you building there. I'd say the same to people who put houses on seashores, or cliff faces where there is landslide risk.
Because insurance companies are fucking ghouls, the system doesn't work that way, which is why I agree with you considering the current system.
Once a risk is sufficiently known and likely, it becomes a subsidy.
I live in Tampa 50ft above sea level which hasn't been hit directly in 100 years and my property value would only go up if sea levels rise. My house is 70 years old and made of concrete block.
There are many more houses not in flood zone than are but everyone is getting hit. So while it's great you are't covering any risk for us down here, risk is still being spread, which is what insurance is for btw.
My father in law has a house on stilts in the woods nowhere near any flooding or water because the guy who built it just wanted a house on stilts, he has a very hard time finding insurance now because of a "if stilts then deny" business rule somewhere in some automated system.
I am not a fan of the political climate down here or its policies, but it wasn't always this way. The current insurance situation is ridiculous whatever the reason similar to health insurance and to me it seems mostly related to profiteering at all levels.
All federal taxpayers are subsidizing Florida and much of the southeast coast via NFIP, and have been for a long time.
And insurance is for spreading unknown and unlikely risks. Spreading costs from likely and known risks is called a subsidy.
That is why your house 50ft above sea level would have a lower premium than one likelier to flood at a lower elevation.
All premiums are going up do to wind coverage not water, now define unknown and unlikely vs known and likely. Again Tampa hasn't been hit by a hurricane in 100 years, I am sure it will get hit at some point which is known but is that likely or unlikely?
All insurance runs on actuarial science, likely or unlikely are not an actuarial term afaik, all covered risks are known at this point it's just a matter of their statistical probability.
If an insurance company thought it could make money and people would be willing and able to pay the premiums necessary, they would be selling policies.
The only reason they are not is because they think the premiums they are able to collect (either due to regulatory limits or customers’ budgets) are not enough to offset losses.
Not an agent, but a company that works with multiple insurance companies to find options.
Looks like rents are going to go up.
The article itself is showing exactly what happens when you have price controls - supply dries up and the market falls apart.
A price control that sets a price where a sufficient number of people are willing to perform a service or make a good do not cause shortages. Such a control in such a circumstance prevents companies from having too much pricing power over essential services. Thus they do accomplish something in such a case.
Price controls can be a good thing and when done properly allow for providers to make a sufficient amount of profit to be worthwhile for enough people whilst preventing gouging.
Preventing "gouging" is the effect of capping the amount the of profit. Regulating the price that utility companies can charge has not resulted in shortages. For the most part, regulating how much insurance companies can charge has not resulted in shortages. Price controls, in and of themself do not cause shortages.
If you have to apply for a price hike, and it can be modified or refused, that's a form of price controls. And climate change isn't causing PG&E to be worthless idiots; they've always been that. The change is in the climate of the courts; they're now being held responsible.
Reading the article is a superpower.
If you rent, your landlord is responsible for insurance for the structure, but you can/should get insurance for your belongings and in the event that your actions cause damage to the house or to people.
It is nearly impossible to get a mortgage on a habitable house without getting home insurance, because the bank doesn't want to loan you $400k on a $500k house, have the house burn down, and since the land is only worth $100k and you still owe $400k, you just walk.
Even if you own the house outright, home insurance is one of those "good idea" unless you can take a complete structure loss on the teeth and keep moving. And if you're renting it, you want it for the liability protection, too, because tenants can and will sue, and if your policy is big enough, the insurance company lawyers will defend.
But if you own a house in the sticks outright and don't want insurance, you don't have to have it, I don't know of any state that requires it the same way car insurance is required (and even car insurance isn't required if you never drive your car off your land).
Usually for a mortgage it is. If you want to be uninsured on property you buy without a mortgage, that’s generally legally allowed, even if not necessarily desirable.