How do you stop the middle class from owning homes? You create inflation, have a high cost of housing, then if that does not work, make it too expensive to have insurance. Without insurance you can not get or keep a home loan.
“State Farm, the largest insurer in California, announced it will not renew coverage for 72,000 homes and apartments starting this summer, a decision that could significantly increase housing costs for many residents amid a backdrop of destructive wildfires in the state.
The company, which holds a fifth of the home insurance market in California and is the largest property and auto insurer in the U.S., cited the growing risk of catastrophes, rising costs, and outdated regulations as factors behind its decision to discontinue policies for 30,000 homes and 42,000 apartments.”
Another factor in the Newsom effort to keep California in a Doom Loop. We are dying. It is not a murder, it is suicide.
State Farm to Drop 72,000 Policies in California, Citing Wildfire Risks and Cost Concerns
Current Staff, 3/22/24 https://www.westsidecurrent.com/news/state-farm-to-drop-72-000-policies-in-california-citing-wildfire-risks-and-cost-concerns/article_572f901c-e862-11ee-ad94-739446e1143b.html?utm_source=westsidecurrent.com&utm_campaign=%2Fnews%2Fstate-farm-to-drop-72-000-policies-in-california-citing-wildfire-risks-and-cost-concerns%2Farticle-572f901c-e862-11ee-ad94-739446e1143b.html%3Fmode%3Demail%26-dc%3D1711122421&utm_medium=auto%20alert%20email&utm_content=headline
LOS ANGELES — State Farm, the largest insurer in California, announced it will not renew coverage for 72,000 homes and apartments starting this summer, a decision that could significantly increase housing costs for many residents amid a backdrop of destructive wildfires in the state.
The company, which holds a fifth of the home insurance market in California and is the largest property and auto insurer in the U.S., cited the growing risk of catastrophes, rising costs, and outdated regulations as factors behind its decision to discontinue policies for 30,000 homes and 42,000 apartments.
State Farm’s March 20 statement emphasized the move was made after careful consideration of its financial situation, affected by inflation, catastrophe exposure, reinsurance costs, and regulatory limitations. The insurer stressed the necessity of these actions to maintain its financial solvency and capacity to pay claims.
This announcement follows a previous decision by State Farm to halt new policies in California due to construction cost increases, escalating catastrophe risks, and a challenging reinsurance market. It coincides with a yearlong effort by California’s insurance commissioner to reform home insurance regulations to stabilize the market, which includes allowing insurers more freedom to adjust premiums.
The California Department of Insurance expressed concerns about State Farm’s financial stability following the announcement. Deputy Insurance Commissioner Michael Soller highlighted the importance of ensuring the company can fulfill its obligations to California customers.
The move to non-renew policies has drawn scrutiny, especially as it comes after the state’s Department of Insurance approved a 20% premium increase for State Farm based on its current number of policyholders. Critics argue that the insurer’s decision to drop 72,000 policyholders warrants further review and potentially an investigation.
Industry experts suggest that the dropped policies likely belong to properties in wildfire-prone areas, where obtaining standard insurance coverage has become increasingly difficult. These property owners may have to resort to the California FAIR Plan, a state-created insurance pool that offers basic coverage at higher costs. The reliance on the FAIR Plan has grown significantly as insurers limit coverage in response to recent wildfire destruction.
State Farm says it plans to begin the policy non-renewals on July 3 for various policy types, with commercial apartments following on August 20. The California Department of Insurance advises affected customers to seek assistance in finding new coverage through their resources.
As the state works towards comprehensive insurance reform by December 2024, there are calls for the Department of Insurance to expedite the release of proposed regulatory changes to offer immediate relief to consumers facing coverage issues.
