Little by little the economic base of California is collapsing, thanks to the policies of the Hollywood Slicky. Now we find that a major insurance company can no longer afford to do business in California. That means homes will go without insurance, new homes can not be built—and only the rich will be able to afford a home and insurance.
If gets worse:
“Established in October 2022 and touted as a first of its kind, the state program requires insurance providers to discount policies for property owners who mitigate wildfire threats by installing fire-rated roofs, enclosing eaves and creating ember-resistant zones. Insurance companies have 180 days to submit a wildfire risk assessment or score, which the state can appeal.
Property insurers in recent years have pulled coverage from tens of thousands of homeowners across the state in the wake of devastating wildfires.
DOI Commissioner Ricardo Lara in September 2022 invoked a law — signed in 2018 by then-Gov. Jerry Brown — prohibiting insurance providers from canceling or refusing to renew plans for properties affected by wildfires until 12 months after the fire.
RELATED: FAIR Plan seeks nearly 50% premium hike from Department of Insurance”
Now even the State has to increase the insurance of last resort by 50%. California is unaffordable—and Newsom wants this for the entire nation.
State Farm halts new property insurance policies in California
The company cited rising construction costs and its “rapidly growing catastrophe exposure.”
By SAMANTHA GOWEN, Orange County Register, https://www.pasadenastarnews.com/2023/05/26/state-farm-says-no-new-property-insurance-clients-in-california/?utm_email=95C3E5E4E4E5A580647814C571&g2i_eui=EkkljicCPIfkwNMwSNF%2fVuaFW%2bRGQvNIJm1HyKNlcI8%3d&g2i_source=newsletter&lctg=95C3E5E4E4E5A580647814C571&active=no&utm_source=listrak&utm_medium=email&utm_term=https%3a%2f%2fwww.pasadenastarnews.com%2f2023%2f05%2f26%2fstate-farm-says-no-new-property-insurance-clients-in-california%2f&utm_campaign=scng-psn-localist&utm_content=curated
State Farm said Friday, May 26, that it will stop accepting new applications for property and casualty insurance in California, citing rising construction costs and its “rapidly growing catastrophe exposure.”
The policy change for personal and business lines is effective Saturday, May 27, State Farm said. The change does not apply to personal auto insurance or existing home insurance policies in the state.
SEE MORE: Housing developments could be delayed amid insurance struggles
In a statement, the company said it would work with the California Department of Insurance to restore its market capacity in the state.
“We take seriously our responsibility to manage risk,” the company wrote. “However, it’s necessary to take these actions now to improve the company’s financial strength.”
State Farm holds the largest share of property and casualty insurance policies in the U.S. and controls about 8.3% of California’s market, writing at least $7 billion in premiums, according to 2021 data compiled by the state.
RELATED: California homeowners could continue losing insurance as wildfire threat looms
Michael Soller, spokesperson for California’s Department of Insurance, said Friday evening via email that the policy change by State Farm was among factors “beyond our control, including climate change, reinsurance costs affecting the entire insurance industry, and global inflation.”
Instead, the DOI is focusing on “protecting consumers” through its Safer from Wildfires discount program, Soller said.
Established in October 2022 and touted as a first of its kind, the state program requires insurance providers to discount policies for property owners who mitigate wildfire threats by installing fire-rated roofs, enclosing eaves and creating ember-resistant zones. Insurance companies have 180 days to submit a wildfire risk assessment or score, which the state can appeal.
Property insurers in recent years have pulled coverage from tens of thousands of homeowners across the state in the wake of devastating wildfires.
DOI Commissioner Ricardo Lara in September 2022 invoked a law — signed in 2018 by then-Gov. Jerry Brown — prohibiting insurance providers from canceling or refusing to renew plans for properties affected by wildfires until 12 months after the fire.
RELATED: FAIR Plan seeks nearly 50% premium hike from Department of Insurance
A moratorium on insurance price increases during the pandemic only heightened tension within the insurance industry.
“Risks are getting worse, and rates are going to have to go up to ensure insurers are solvent and operational in California,” Seren Taylor, a senior legislative advocate with the Personal Insurance Federation of California, told the Bay Area News Group in August 2022.
Lara in 2019 ordered California’s FAIR Plan, an insurance plan of last resort, to expand its coverage beyond fire to include liability, theft and other parts of a homeowner’s policy. Insurance companies, which manage and fund the state-created FAIR Plan, have challenged the newer rules in court.
In March this year, FAIR Plan administrators agreed to double the plan’s commercial coverage limits to $20 million for businesses such as homeowners associations that were unable to find insurance through traditional providers.
The number of California properties facing severe wildfire risk is expected to grow sixfold in 30 years, according to the nonprofit First Street Foundation.
The DOI offers updates on consumer rights and options at its website insurance.ca.gov. Its consumer hotline is 1-800-927-4357.
