LA Wildfires Push California Insurance Market To Its Limit (bloomberg.com) 179
Five wildfires in Los Angeles have already burned more than 10,000 structures, threatening to upend California's fragile balance between climate risk and home insurance. The Palisades Fire has damaged or destroyed more than 5,000 buildings in an area that liability experts had previously identified as one of three particularly vulnerable regions in the state.
JPMorgan Chase estimates insured damages could reach $20 billion, positioning this as likely the costliest wildfire in U.S. history. The crisis comes as California's insurance market struggles, with seven of the 12 biggest home insurers having limited their coverage in the state over the past two years. The state-backed insurer of last resort, the California FAIR Plan, now faces exposure of up to $458 billion, while holding only $200 million in surplus cash reserves and $2.5 billion in reinsurance. Gusts of up to 100 miles per hour have fanned the flames, with more than 57,000 structures in severe danger and more than 150,000 people under evacuation.
JPMorgan Chase estimates insured damages could reach $20 billion, positioning this as likely the costliest wildfire in U.S. history. The crisis comes as California's insurance market struggles, with seven of the 12 biggest home insurers having limited their coverage in the state over the past two years. The state-backed insurer of last resort, the California FAIR Plan, now faces exposure of up to $458 billion, while holding only $200 million in surplus cash reserves and $2.5 billion in reinsurance. Gusts of up to 100 miles per hour have fanned the flames, with more than 57,000 structures in severe danger and more than 150,000 people under evacuation.
CA - State of the self insured (Score:4, Insightful)
Re:CA - State of the self insured (Score:5, Informative)
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Housing construction is changing due to climate change. For example in the Florida Keys, where the highest land is just 10 feet above mean high tide, new houses have to be built with a sacrificial first level built of salt water resistant materials, where you aren't allowed to use as living space or storage except for things that are normally kept outdoors. Note how this works: there are architectural and material standards, plus usage restrictions.
California's building codes in fire prone areas are simi
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There's an exception (Score:3)
In my home town, at the height of the cold war, a few people built homes to withstand a nuclear war. They dug out a basement, built a single-level house, and covered the top with 36 inches of soil. The only openings were the (recessed) doors and a few windows.
While not a "typical" house, they had the added advantage that they were cool in the hot midwestern summers, and warm in the cold midwestern winters. And they never needed painting or reroofing.
So it is possible to build "fireproof" houses, but
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No, you're quite fucking dead.
Re: There's an exception (Score:2)
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You think 36 inches of soil will save you from a 2100F fire? That's adorable.
No, you're quite fucking dead.
Significantly decreasing the exterior materials that are flammable significantly decreases the chances of that structure being destroyed by fire. Even the insurance companies (or at least some of them) recognize this and cancel policies based on exterior building materials.
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There's a huge fucking leap between making sure a house can't go up in smoke over a single ember landing on it, and pretending like anything in the universe you make it out of can protect it against a 90mph conflagration that burns so hot it can cause wood to spontaneously combust 30 feet away. That includes the wood inside your home, if the fire gets close enough to heat your magically perfectly fireproof exteri
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Your brick tank would crumble to pieces and fall on you in an earth quake. CA code strongly discourages structural masonry for good reason.
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Obviously, you would evacuate because you wouldn't be able to survive inside the house at the time of the fire. But I would be willing to bet that everything inside the house would be just fine as long as there was no path for the fire to make it inside the house.
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You have a fundamental gap in your understanding of how fire events like these propagate.
The air is 2000 degrees.
Your door will then be 2000 degrees.
Then the air in your home.
Then your curtains. And your curtains will burn.
The only thing you can do is keep the fire well, well away from you. But if it gets over you- 36 inches of soil won't stop your home from becoming a charcoal pit.
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Well, a car sitting in someone's car port isn't particularly fireproof, given that it's sitting on a 15 gallon tank of gasoline. So that tells us nothing.
It's a matter of degree, but if you want to argue what's *possible*, it is absolutely possible to build a "house" (note scare quotes) that can survive this. You just build it like an inside-out pizza oven, with reinforced refractory concrete about a foot thick and clad in fire bricks and maybe those tiles they line blast furnaces with. You might not be a
Re:CA - State of the self insured (Score:5, Insightful)
Do you want to know the real reason why insurers are leaving Florida? It has nothing to do with climate, and everything to do with fraudulent inspections.
Florida building codes demand a certain level of hurricane resistance. Inspectors signed off on these buildings being built to code. But they weren't, and the inspectors didn't actually inspect them. So now Florida has millions of houses that probably weren't built to code, and no one knows which ones.
Now you, the insurance company, know that each house can expect to see X hurricanes per decade, and the average claim per house per hurricane is Y dollars if the roof stays on, and 30*Y if the roof comes off. You've been pricing your policies based on a low risk of the roof flying off, based on signed inspections saying that the root was fastened down correctly. But now you know that a large but unknown fraction of those inspections are fraudulent, and you don't know which ones. What do you do now?
If you answered C: Get the hell out of Florida, you are right and your company maybe doesn't go bankrupt in a few years.
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Citation needed.
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Do you want to know the real reason why insurers are leaving Florida? It has nothing to do with climate, and everything to do with fraudulent inspections... You've been pricing your policies based on a low risk of the roof flying off, based on signed inspections saying that the root was fastened down correctly. But now you know that a large but unknown fraction of those inspections are fraudulent, and you don't know which ones. What do you do now? ... Get the hell out of Florida
Taking your own description as granted, I don't see how it has "nothing to do with climate."
Fraudulent inspections and climate change together compound risk. It sounds like people in Florida were able to get away with substandard home inspections for a while, but now that there's substantially increased risk of storms that test the limits of building codes, the risk has become too much to bear and insurers are being scared off.
There are many examples in the climate change "fearmongering" literature of risk
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My point is that insurance companies assess risk and when the risk is that high either they have to charge more or get out. Creating a government progr
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... their incompetent leaders' policies cause my house to burn down.
Which are the policies which lead to your house to burn down / this disaster? My understanding was exacerbated due to high-speed wind which helped to spread the fire and not something cannot be easily stopped ... Also read some reservoir was empty when it supposed to be full therefore the water shortage.
I'm not not an american citizen
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They refuse to do simple things like removing (invasive) highly flammable eucalyptus or requiring automatic water shutoffs to prevent burnt homes from bleeding the hydrants dry. I'm sure there's plenty of other things they could implement, such as requiring less combustible materials like brick or stucco.
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They refuse to do simple things like removing (invasive) highly flammable eucalyptus or requiring automatic water shutoffs to prevent burnt homes from bleeding the hydrants dry.
Anything automatic is going to burn when the house does. About all you can realistically do is shut off water to everything but the hydrants, and that doesn't need to be automatic. In fact, it is probably better for it to be manual to maximize the chances of it surviving.
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According to this article [latimes.com], the 117-million-gallon Santa Ynez Reservoir was down for repairs, but that's only a tiny share of the city's 91 billion gallons of water storage. And even if it had been in operation, the water level of that reservoir would have been kept purposely low so it wouldn't go stagnant due to people using less water in the winter.
Which leads to a question: why not use reclaimed water instead of drinking water to put out fires? It doesn't matter so much if that water goes stagnant. Now is
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How big does a fire break have to be to cover the case of wind gusts of 100mph?
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No one mitigation is the entire solution. The bad policy issue is not just X, but X, Y, Z, and W.
The PCH and small roads are likely not designed as a very effective firebreaks under the conditions. Which is why you also have controlled burns of vegetation to remove potential fuel under more favorable conditions.
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If ya choose to live in the wildlands...
Yes, nature is purty. It's also red of fang and claw.
I own a home (an actual house, not a condo/townhome/flat). It's in an urban setting. Yes urban/suburban living is kind of sucky; But I also don't have insane insurance rates
And I STILL have idiot political leadership
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Just CA voters? Just at the state level?
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most California voters are pieces of shit who vote for the most incompetent people ever to get into office.... Those people, through their own bad decisions, as taxpayers, should be on the hook when their incompetent leaders' policies cause my house to burn down.
What, in your view, would competent political leaders have done to prevent the fire? It's not like a politician can repel flames with his mojo.
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For someone owning a hole in California, you seem to have an amusing idea of what a fast-moving hurricane-wind fueled fire is.
You wouldn't even slow it down.
Re:CA - State of the self insured (Score:5, Insightful)
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Ron Desantis did not create a hurricane and wipe away coastal homes in Florida.
Don't know about that, he's a pretty big blowhard. :-)
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California did allow homes to be built without the appropriate protections and mitigations in place.
Likewise; Ron DeSantis and their predecessors did allow homes to be built in vulnerable areas without construction standards requiring adequate protections to reduce the number that would be wiped away.
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There are no appropriate protections or mitigations for what happened there, except not to build there, or pray that there's enough moisture in the carbonaceous materials there that the Santa Anas can't convert them to instant fucking fuel.
There were 90+mph winds feeding those flames. They melted cars.
Flames leaped miles at a time.
Likewise, there isn't a square inch of Florida that is safe from hurricanes.
There is no construction standard for wi
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Protections and mitigations? Are you fucking kidding me?
There are no appropriate protections or mitigations for what happened there, except not to build there, or pray that there's enough moisture in the carbonaceous materials there that the Santa Anas can't convert them to instant fucking fuel.
Given that there is a fire in one's neighborhood, there's little that can be done at that time. However, many of the neighborhood fires were ignited by floating hot embers landing on houses with vulnerable exterior materials. There are many things that can be done to prevent these ignitions, but they cost money and require existing houses to be retrofitted. Current building codes need to be updated, but the big issue is what to do with existing homes -- what requirements to make and who bears the cost.
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Can you make the external more fire resistant? Of course you can.
And plenty of houses there were.
And that helps against some things.
But it doesn't help against a 2100 degree fucking maelstrom fueled by hurricane-force winds.
Nothing short of an infinite supply of water would have, and someone suicidal enough to stay behind and keep trying to apply it, even though the air within 30 feet of the fire would kill you instantly, and cause anything flammable to spon
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There would be a lot LESS houses burning down had the state maintained proper fire breaks and invasive species management
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You're obviously extremely biased. Your use of twitter as a source, using the word faggot repeatedly and repeated strawman fallacies, give you absolutely no credibility.
You can't complain about illegal immigrants anymore. The GOP is the party of fire all americans and hire illegal immigrants. You are the party of president-elect Leon now.
"There's no shortage of water in Southern California, but there was a shortage of water in the areas that had the fires because the storage they had locally in the neigh
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He added that cities across the U.S. have water distribution pipe systems that are designed to provide enough water to fight large fires. However, if the fire is massive, the stored water will only last for a short time before the supply is exhausted.
"I think the reason why they ran out of water was that the [fire] was much bigger than what the hydraulic systems in the local storage systems were designed for, even though the region, in California, has really quite a lot of water," Lund said.
The problem was not a generalize shortage of water in the LA area. After all, it's not at all the case that people outside of the fire areas suddenly had no water.
The problem was a localized water and water pressure problem. This is to be expected with a fire of this magnitude. The only way to avoid this problem is to massively overprovision for water pipes and pumps at all possible locations, but that cost is prohibitive and not even close to being practical.
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Remind me, which political policies resulted in an essentially absent rainy season and wind gusts of 100mph when 40mph is more typical?
You've done an excellent job of connecting political issues to the situation but bugger-all for showing that climate change was not involved.
Re: CA - State of the self insured (Score:2)
100 mph gusts for Santa Ana winds isn't a new thing. That has nothing to do with climate change.
No climate change necessary; wildfires are the natural climate in much of California. Before the white man got there, the natives regularly burned the land to keep wildfires from getting out of hand. Whites instead build McMansions on fire plains.
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However, climate change has an effect, in that the low-humidity katabatic winds ability to cause a perfect tinderbox is based upon the humidity of the ground level the winds fall on.
Further,
CA executes controlled burns of more acreage than Native Americans even existed upon, so that's a horseshit narrative.
Re:CA - State of the self insured (Score:5, Insightful)
California water management caused reservoirs that were needed to fight the fires to be offline.
Nope. And your source doesn't actually say that. The reservoir was, in fact, offline for previously scheduled maintenance. It was not offline because of a shortage of water. Unless by "California water management", you mean California repairing their reservoirs, in which case you're technically correct — the best kind of correct — but misleading to such a degree that you might as well not be.
They should have had suplemental resevoirs given that they were funded almost a decade ago by tax dollars (Proposition 1, 2014). Instead the projects got delayed [wikipedia.org], and delayed [wikipedia.org], and delayed [politico.com].
Do you realize how far away that reservoir is? Firefighting needs lakes and reservoirs a few miles away, not an eight-hour round-trip flight away. You can put in all the reservoirs you want in northern California and it still won't help when the fire is in southern California. We're talking about nearly the distance from Tennessee to New Orleans here.
Then in Pacific Palisades, forest management were delayed to "protect" an endangered shrub (thanks to the California Environmental Quality Act). Then, almost comically, in 2019, to improve fire safety, LADWP (the LA power company) started replacing 100 year old power poles, but an amateur botanist reported damage to the shrub. LADWP replanted the shrub, and paid a $2m fine.
I can't find any sources other than NY Post (which is pretty unreliable) that corroborate that story. Contemporary stories written at the time suggest that LADWP was fined for the damage their crews caused while replacing the poles, which implies that they did, in fact, replace the poles, but did so in a manner that caused a lot of damage.
And that's a reasonable outcome. When you're cutting brush with a bulldozer to get to those poles, you have a legal obligation to go around any endangered plants. This goes without saying. Nothing prevented them from doing the work — only from being grossly reckless in doing so.
There is California's love of illegal immigrants (what could possibly go wrong?), even though they start these insane fires. Citation: https://nypost.com/video/flame... [nypost.com]
Again, NY Post is a tabloid. You might as well be posting stories from the National Enquirer. And there are crazy people everywhere. Want to blame someone? Blame Ronald Reagan for not finding ways to work around Supreme Court decisions regarding involuntary commitment of people with serious psychological problems, which resulted in most of them ending up homeless and on the streets.
The rest of your post is more of the same, and appears to blame entire groups of people for the actions of a few. That sort of thinking makes the world a worse place, and I would urge you to think a bit more about what would happen if you lived in a place where people like you were in the minority, and whether you would like to be treated with suspicion and contempt for it, and then treat others the way you would want to be treated. Just saying.
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The reservoir was, in fact, offline for previously scheduled maintenance.
Offline since February of last year to repair a three foot tear in the cover... A reporter did not observe any construction materials or work in-progress when he visited the site.
Why Is the Santa Ynez Reservoir Empty? [thefp.com]
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All the reservoirs in the world don't help the fact that you would have needed 80inch pipes to flow the amount necessary.
Say what you want about California's leadership- they seem a bit crazy to me too, but you're worse than they are. You're a willfully stupid political shit-slinger.
Expect bankruptcies (Score:2)
and abandonment of California by insurance companies, followed by bank failures as properties are foreclosed due to lack of insurance.
Then prepare for the total collapse of the real estate market as insurance becomes unavailable.
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Re:Expect bankruptcies (Score:4, Informative)
I am not sure what happens when you lose coverage during your payment schedule though.
It's a default on the loan and they can call the balance of your loan to demand immediate repayment of the balance in full Or foreclose on the property, but they will most likely get replacement insurance that pays out to them at a very high cost, and the premium will be charged to you.
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I am not sure what happens when you lose coverage during your payment schedule though.
It's a default on the loan and they can call the balance of your loan to demand immediate repayment of the balance in full Or foreclose on the property, but they will most likely get replacement insurance that pays out to them at a very high cost, and the premium will be charged to you.
The bank/lender will purchase force-placed insurance on the property and add the premium to the monthly mortgage payment. This is never in the borrower's best interest they policies are more much expensive than what they can get on the open market. Not sure how readily force-placed insurance is available for homes in wild-fire danger zones in CA.
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and abandonment of California by insurance companies, followed by bank failures as properties are foreclosed due to lack of insurance.
Then prepare for the total collapse of the real estate market as insurance becomes unavailable.
The state will step in and fill in the void left by the insurers. Unfortunately to fund this they will have to *crank* up taxes, as insured would loose their mind if the rates rose to what it cost to actually cover the risk. So the cost of living in the LA area will be subsidized by the rest of the state.
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You mean the climate? No way, GOP would rather blame Dems about not dotting every 'i' and crossing every 't' in handling emergencies. Orange Herrings "work" for elections, so they'll do more. The Toddler King has been bigly enabled. One Gopper is even blaming the wind & fire as God's punishment for LGBTQ+*.
Neverminded that hurricane areas are in a similar insurance dilemma.
* What's next, God's punishment for allowing Haitians to eat
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What should be happening is an attempt to change the states approach to firefighting, probably through automation and drones.
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If the article is correct: "The state-backed insurer of last resort, the California FAIR Plan, now faces exposure of up to $458 billion, while holding only $200 million in surplus cash reserves and $2.5 billion in reinsurance", this is most dysfunctional math situation possible with just $200mn in cash and $2.5bn in coverage available to cover $458bn in exposure. CA is absolutely f-ed and all losses will be socialized through state taxes. No more yapping about CO2 emissions anymore, get to work and fix stuff.
I believe I heard/read that (basically) the law says CA can make the insurance companies make up the shortfall, and those companies can then pass those costs along to their other customers in the state.
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I believe I heard/read that (basically) the law says CA can make the insurance companies make up the shortfall, and those companies can then pass those costs along to their other customers in the state.
Perhaps, but there is also a rate increase moratorium. I don't know if one overrides the other.
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That's an approximately 6% reserve to exposure ratio. Most insurance companies are around 8%. That's not really a particularly notable situation, especially since FAIR is state-backed in addition to those cash reserves and reinsurance.
Re: Expect bankruptcies (Score:2)
That's not how this works. Taxes aren't used to fund the insurance; insurance premiums are. So, existing homeowners in other parts of the state will pay higher premiums to fill the fund. No taxes necessary.
And really, that's about right. Too many people treat their homes like investments. Any financial pressure that can be placed on homeowners is a social good. Higher insurance, higher property taxes, etc.
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The state will step in and fill in the void left by the insurers. Unfortunately to fund this they will have to *crank* up taxes.
CA was facing a $68 billion budget deficit before NVIDIA saved their ass.
Great insights from David Yelland / Simon Lewis (Score:4, Informative)
From 14m30s onwards, although not sure how accessible this is outside the UK: https://www.bbc.co.uk/sounds/p... [bbc.co.uk]
Discusses the fact that it will end up being insurers, not governments, who end up having to tell people the facts they don't want to hear about climate change being a reality, as cover becomes impossible to provide (and thus procure) for swathes of almost every country in the developed world, from the US to Spain to the UK.
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I'm not sure insurers are above lying from time to time. But truth can be seen - can't be hidden - in whether they do or don't offer coverage, and what they charge for it.
Fire Winds (Score:5, Insightful)
It's almost as though you shouldn't build your home in a place where "fire winds" have been a known thing since the 1800s. Government probably shouldn't be subsidizing insurance for them either.
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It's almost as though you shouldn't build your home in a place where "fire winds" have been a known thing since the 1800s. Government probably shouldn't be subsidizing insurance for them either.
It's almost as though you shouldn't build your home in a place where earthquakes have been a known thing since the 1800s It's almost as though you shouldn't build your home in a place where hurricanes have been a known thing since the 1800s It's almost as though you shouldn't build your home in a place where tornados have been a known thing since the 1800s It's almost as though you shouldn't build your home in a place where floods have been a known thing since the 1800s It's almost as though you shouldn't
The role of California insurance regulation (Score:5, Interesting)
The wildfires are terrible, yes. But insurers have been prevented for decades, from using fire risk data in calculating premiums. Instead, they have been required to use only past data for an area. https://www.msn.com/en-us/mone... [msn.com] So even if an area is a high risk for fires, if that area hasn't had a major fire *yet* then insurers can't charge appropriate premiums to reflect that risk. This law has now been changed, but probably too late.
If people can't afford higher insurance premiums, they will be pushed to relocate to areas with lower risk. This is a good thing.
Sometimes, regulation does more harm than good.
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But here's the other thing that's going to happen wh
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I know people who own homes in California who pay around $80 to $100/month which includes fire.
No, you don't - what you describe sounds like "renters" insurance, you can't insure a stand alone residence in California for $80-100/month.
But here's the other thing that's going to happen when this all settles: people do not update their insurance relative to the home values.
Homeowners don't set the insured value on their home, the insurance company assesses a value and that is what is driving up insurance rates. I have never heard of a stated-value homeowners insurance policy, I suspect it is possible in certain circumstances (as a backup plan to a homeowner that is essentially self-insuring their home, as many very wealthy homeowners do
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Indeed, insurers will sell you insurance for whatever amount you decide to pay for. https://www.libertymutual.com/... [libertymutual.com] When you are paying a mortgage, this option is not available to you because the bank decides how much insurance you must have.
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I know people who own homes in California who pay around $80 to $100/month which includes fire.
No, you don't - what you describe sounds like "renters" insurance, you can't insure a stand alone residence in California for $80-100/month.
That's actually only a little bit below the average for California, so yes, you can. You'll probably also want to add earthquake coverage, though, which will double that number. And if you're living in a fire-prone area, that number probably isn't even close. But that isn't completely impossible by any means.
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It's an insurance problem because the whole concept of insurance is risk pooling. If 1,000 homes are worth $500,000 each, and the average risk of being destroyed by fire is 1 home per year, then an insurance company only needs to collect $500 per homeowner to break even. If the risk is an average of 10 homes per year, insurance has to collect $5,000 per homeowner to break even.
California regulations have forced insurers to base rates on what has happened in the past (1 home), not future risk (10 homes). So
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Maybe things are different in Texas, I don't know, but when I still had a mortgage, I still worked with the insurance company directly to get the coverage I wanted. The mortgage company had to be good with it too, yes, but beyond that, it was my decision to buy coverage for more than was required.
But this is not about *coverage* amounts, it's about the ability of insurance companies to cover *their* losses. They have to charge enough in premiums to cover their risk of loss, for all the homes they cover. If
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Voters passed a proposition to prevent insurers from raising premiums to match the risks they faced, and the insurers first stopped writing new policies, then stopped renewing policies, and the people that will suffer are the people that voted this all into being.
They thought they beat the system, but they only hurt themselves.
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Perhaps home-owners insurance should only be required for a livable replacement, not an equivalent replacement. For example, just enough to rebuild a smaller house at the same location or move to a cheaper neighborhood.
You don't understand the purpose of insurance in this context.
Quick example - I buy a home for $500,000. To rebuild the home if destroyed is, lets say, $450,000 (new construction is more expensive than existing structures, and lets not forget the cost of removing the destroyed structure). So, my lender requires $450,000 in insurance coverage for your property. You choose to insure it for $250,000 to rebuild with a modular home.
Your home burns down, the insurer gives you $250,000 and you now have a $250,000
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Yes, but it does have a role for paid-off mortgages too. As a homeowner, even if your mortgage is paid off, insurance keeps YOU whole, keeps YOU from losing hundreds of thousands in the value of your property. Same result, requiring insurance to pay only half the value for an equivalent livable space, is not real insurance. It's not about a place to live, it's about property loss.
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Insurance isn't about ensuring you have a place to live, it's about protection from property loss. Insurance is applicable even if I don't live in the house, I still want to cover my risk of losing money if the property is destroyed.
The crisis comes as California's insurance market (Score:3)
The market struggles, or the bookies profit margins are hurt?
Yeah, it's KIND of similar, but they BEEN profiting for decades
It's going to be bad. Very bad (Score:2)
California residents can already expect premium increases of 40% or higher when you renew. This is due to insurance companies threatening to leave the state. The state enacted legislation to pass through the cost of re-insurance. Now with the wildfires in LA, premiums might double for everyone in the state.
Going Bare - Not having homeowner's insurance. This is where we might be headed, at least for those who own their homes free and clear.
Right now, there is no California state law requiring you to have hom
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Right now, there is no California state law requiring you to have homeowner's insurance. The requirement is forced on you when you have a mortgage by the bank.
Yeah...
I expect the state might make it a requirement for all homes regardless of whether they are free and clear or not, just to prop up the insurance companies losses.
So homeowners need to buy homeowner insurance "to prop up the insurance companies"? Really?
Just like there is a requirement for auto insurance.
States require LIABILITY insurance coverage, auto lenders require COMPREHENSIVE coverage to cover theft or damage to a covered auto.
You must have liability coverage to compensate victims when your car hits another car and/or hurts a person - that coverage is what the state requires.
Liability coverage in the housing industry would cover people or property hurt/damaged BY THE HOUSE - is that really what we're tal
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It will be sort of like health insurance in California. Everyone will be required to participate by having an active policy. You won't be able to pay your property taxes without a policy in force. If you can't pay your property tax, the city will place a lien on your home, and sell it out from underneath you to recover the cost of the property taxes.
This is just like you can't register your car in California without an active insurance policy.
Your wood-framed house will be viewed as a liability to your imme
No free market (Score:2)
CA dept of insurance regulates this. It sets prices, practices and coverage requirements. It's not really a free market, so the limitations make it impossible to offer insurances that would otherwise be available.
The first approximation of a fix should be to abolish the department, but a better solution might be to create something like a set of standards for coverage verbiage to make it possible to commoditize offerings and make products comparable. All other limitations should probably be removed. A f
It's obvious (Score:3)
Also Everyone: I don't understand why my insurance coverage on total replacement has gotten so expensive!
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Everyone: Hurray! My house value has gone up 300% over the past ten years!
Also Everyone: I don't understand why my insurance coverage on total replacement has gotten so expensive!
That's a questionable way of looking at it. In practice, the value of your house hasn't gone up by 300%. The value of the land under it has gone up by 3000% and the value of the home has gone up by 30%. The actual cost of rebuilding the house in place has gone up, but that is likely to be only a fraction of the cost of the home, because a lot of the value comes from the location.
Re: It's obvious (Score:2)
Stories to Demistify (Score:3)
We need stories to demystify terrifying events. Claiming some elected officials could protect us from mother nature is one way of making sense of the world. The problem is that we need a story that supports our world view and people's world views are now largely incoherent. When there is no coherent explanation that reduces our terror, blaming politics is convenient. We have someone to blame for lack of a coherent story to tell.
I suspect the reality is that adapting to climate change is going to be very, very expensive. And its really not clear that reducing emissions is likely to have much effect on that. Certainly no immediate effect. So the question is "who pays".
Building codes have a role here too... (Score:3)
Here in Australia, land gets assessed for bushfire risk and gets a BAL rating. The building codes then set down requirements for different levels of risk so that houses in bushfire zones are built in ways that reduce the risk. (e.g. in the highest risk areas you have to use non-flammable materials when you build)
California should do the same and require that new builds in areas at risk of fires meet stricter building codes that will reduce the risk.
PAY UP and SHUT UP (Score:2)
Insurance companies and people are gambling. The people PAY the insurance company hoping they DON'T EVER have a claim. The insurance companies take that money and hope the people NEVER have a claim. It's a win for the insurance company, and sometimes either government regulations (automobile liability insurance) or corporate rules (mortgage company requirements) REQUIRE the people to PAY the insurance company with everyone hoping there's no claim but the insurance company collecting the money in any even
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Yeah, well, the insurance company insures ALL the villages, so even if your whole village burns down, thousands of villages haven't, and the insurance company still makes out.
See how that works?
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Hmm-- a quick factcheck via google suggests that this is true-- insurance companies are making record profits.
Not clear that insurance companies are making record profits in California, though. (Or Florida, for that mattter).
A few links:
https://www.msn.com/en-us/mone... [msn.com]
https://iltla.com/?pg=Blog&blA... [iltla.com]
https://programbusiness.com/ne... [programbusiness.com]
State level companies (Score:2)
Insurance companies are organized and regulated mainly at the state level.
If Nationwide Insurance of California goes bankrupt because of losses, it should not affect Nationwide Insurance of Idaho.
Insurance companies also have multiple companies in the same state depending on risk level, type of insurance, etc. Each of those companies is on its own when it comes to paying claims so that Nationwide Fire Insurance of California cannot be bailed out by Nationwide Flood Insurance of California.
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There were warning signs when Insurance companies refused to continue coverage in your area. The state limited such increases for the higher risk - so insurance doing the math as they always do, said no thanks for that risk, and started walking away. Homeowners should have heeded that warning sign.
The situation sucks, out of this it would be nice to disallow rebuilding in fire and flood risk areas