State Farm won't renew 72,000 insurance policies in California
latimes.com
latimes.com
Are these all clustered in a few hot spots that are likely to go under the next time there is a fire/landslide/earthquake? Why these units and not others? What does State Farm consider the most insurable places to live?
That's almost 60% of the total. I'm guessing because commercial apartments present a more geographically-concentrated fire risk (either you lose all the units or none).
If this was State Farm deciding to drop insurance on homes that are in grossly overgrown forests with no buffer then it would make a lot more sense given the likely increase in fire activity in the coming years.
People should be allowed to live where they want - but it's well past time this country stopped subsidizing the risk of building in places where natural disasters commonly wreck buildings.
In the given picture how much risk is being subsidized by the government? What form does that take? What about East Palestine, OH? Can we live near train tracks? What about Paradise, CA? Can we live near power lines? Blizzards can become natural disasters, is the entire area above the snow line now facing new rules for building?
> commonly wreck buildings.
I can't say much about those buildings right there in the picture, but some of them have clearly been there for decades.
The main form of subsidy that these particular buildings enjoy is the construction and repair of roads on sliding hillsides. A further subsidy is their overrepresentation in the budget of the fire department, since this area is served by relatively more fire stations per capita than the central city. Finally, the topic of this article: in cases of fire, the owners of these buildings will expect the rest of us to bail them out.
FYI, these buildings are also directly atop the Hayward Fault.
> What about Paradise, CA?
It should be obvious that as a matter of public policy nobody should be allowed to build a dwelling inside a forest the way Paradise was built.
The criteria for flagging seems to be houses built before 1985, in areas that have had any sort of wildfire in a x mile radius over the past 20-30 years, and perhaps some other features. The insurance companies will use every possible excuse regardless of the insured's willingness to respond to their bullshit.
Most Californians are finding notice of non renewals and forcing homeowners into a CA state sponsored high cost/low coverage plan. It seems intentional by the state to pickup more money, but that's my tinfoil hat.
Big corporations are such that the left hand and right hand seldom know what they are each doing. A team and I consulted there about ten years ago. In the silo we were working in was the single most risk-averse place I've ever seen. On one hand, that would appear to be a good cultural element given their business, but on the other it was so extreme that I found it to be a major turnoff - it felt so extreme as to be wasteful. Not that hard to imagine then taking an extreme position on who they will insure as the world shifts.
From the article:
> But the enrollment surge is putting a financial strain on the state insurer as it faces a potential loss of $311 billion, up from $50 billion in 2018.
For reference, the entire budget for the state of CA is $224 billion.
Move where the risk is lower, with my apologies to Sam Kinison.
https://www.wired.com/story/insurance-rates-soaring-us-homeo...
https://www.nytimes.com/2024/02/29/climate/smokehouse-creek-...
From a comment koolba provided with liability numbers, this appears to not be the case (potential losses exceeding California’s entire budget). This leads me to believe that California residents have taken on risk beyond what they and the state can afford.
Not great if the world’s fifth largest economy is experiencing this financial stress.
I absolutely hate society picking up the tab for people doing such reckless things with their own homes.
You want to strongly discourage moral hazard (repeatedly funding rebuilds with taxpayer dollars in high risk areas) while not making housing insecurity drastically worse than it already is. I admit this is a tall order with the perpetual housing shortage.
https://www.fema.gov/press-release/20230502/fact-sheet-acqui...
> Acquisition of Property After a Flood Event
> If the homeowner still owes a mortgage on the home, the balance due will be deducted and paid to the lienholder. After required payment(s) have been made, the structure is then demolished and the land is deeded to the local government with its use restricted to open space. The land must remain open in perpetuity.
I don’t care if people want to build in Florida, it’s a great climate… most of the time. They should just burden the real cost by having to pay an insurance rate that actually covers a new house every 5 years.
It will force it to be the luxury it really and it will spur construction shifts to hurricane proof pillboxes.
I recall a NPR story where some guy in Texas had his house flooded and rebuilt by the Fed some 13(?) times! Stop throwing good money after bad, that area is not fit for humanity.
While some of that is climate, much of that is because the natural environment was wiped out and urbanized years ago.
I have a higher wildfire risk not because my home is in some wooded canyon, but there are more plants, trees, and open areas around vs paved cityscape.
We've already seen those poor people who tried to hold back the sea with a $350,000 sand barricade which lasted one hour. Their homes are now effectively worthless.
Some more discussion a few days ago: https://news.ycombinator.com/item?id=39790505
>Michael Soller, deputy insurance commissioner with the Department of Insurance, said in a statement that State Farm’s decision “raises serious questions about its financial situation — questions the company must answer to regulators.”
>“As state regulators, we deal with companies that are national and multinational in scale. To be effective for Californians, we join forces with other states so we can understand the basis for insurance companies’ decisions and how they plan to recover financially,” Soller said. “In this particular situation, we have been working with State Farm’s home state of Illinois to get a full picture of its financial condition and plan for improvement. We need to be confident in State Farm’s strategy moving forward to live up to its obligations to its California customers.”
What made me most angry, though, is how they turned an insurer (AllState, if memory serves right) from a sleepy mom-and-pop shop that collected premia and paid most of them out again when a covered loss occurred into a profit-maximising entity whose bosses were "incentivised" with stock options and implemented McK's glorious plan to boost profits by making it incredibly hard for victims to get their rightful payments. Absolutely despicable.
There are things I don't miss to be sure (traffic immediately comes to mind).
Chinese places here are buffet style, offer pizza.
(Just kidding. Not really.)
The quality and variety are vastly better here, but sometimes you just want comfort food.
I live, work, and shop all within a few blocks, so traffic for me is the exact same as any other mid-sized city suburbs.
Oh, sure, occasionally I get caught in traffic on the freeway because I have to go somewhere farther away. But even then, I only travel between 10 am - 2 pm to reduce chances of freeway traffic jams. Or after 8 pm, too. But, of course, jams can happen at any time. So for when it happens, I just turn on some tunes, and chill out. I think about 150 years ago when I'd have to travel by horse or carriage over rough and dusty roads. So, I get a sweet climate-controlled vehicle, comfortable, with great roads. Traffic jams in my car are still faster than horse and buggy. That's how I look at it.
But what I miss most are not the urban areas (where I lived most of my life), but the countless gorgeous destinations outside of the cities. I know I'm biased, but I can't think of many other places in the world that have as much to offer within a couple hours drive (that's for both LA and the Bay Area, among other metros).
They all said they were never going to move back…
It's the best thing I've ever done and I'll never move from here.