I have heard quite a few whining about the high cost of insurance and the cancelation prior to the fire of home insurance coverage.
It's time to understand the FACTS and how the Democrats that run everything in California failed their constituents.
“Los Angeles wildfires rage as California homeowners battle an ‘insurance crisis,’” says a headline from NBC.
“Thousands of Los Angeles homeowners were dropped by their insurers before the Palisades fire,” another one from CBS says.
“The insurance crisis that will follow the California fires,” one says in the New Yorker.
Clearly, something is amiss with the insurance market in California.
I wrote about the problem in these pages in 2023 after State Farm, a leading insurance provider in California, announced it would no longer accept new applications in the Golden State.
State Farm said its decision stemmed from various factors, including increased catastrophe exposure and the high cost of doing business in California. Though climate change wasn’t mentioned in State Farm’s press announcement, media companies seized on its exit to argue that global warming was making parts of the United States “uninsurable.”
While it might be tempting to blame the climate gods for driving State Farm and Allstate out of California, there’s a simpler explanation: price controls.
One of the basic tenets of an insurance market is this: as risk goes up, so does price. This is common sense, but remember, we’re talking about California. Unlike those in the other 49 states, California lawmakers don’t think insurance companies should be allowed to pass the costs of reinsurance, the insurance companies purchase to protect themselves, on to policyholders. So, they passed a law making it illegal.
www.washingtonexaminer.com
It's time to understand the FACTS and how the Democrats that run everything in California failed their constituents.
How price controls destroyed California’s housing insurance market
As the worst fires in California’s history continue to blaze with no end in sight, the state’s residents aren’t just battling wildfires. They are battling an insurance nightmare. The headlines say it all.“Los Angeles wildfires rage as California homeowners battle an ‘insurance crisis,’” says a headline from NBC.
“Thousands of Los Angeles homeowners were dropped by their insurers before the Palisades fire,” another one from CBS says.
“The insurance crisis that will follow the California fires,” one says in the New Yorker.
Clearly, something is amiss with the insurance market in California.
I wrote about the problem in these pages in 2023 after State Farm, a leading insurance provider in California, announced it would no longer accept new applications in the Golden State.
State Farm said its decision stemmed from various factors, including increased catastrophe exposure and the high cost of doing business in California. Though climate change wasn’t mentioned in State Farm’s press announcement, media companies seized on its exit to argue that global warming was making parts of the United States “uninsurable.”
While it might be tempting to blame the climate gods for driving State Farm and Allstate out of California, there’s a simpler explanation: price controls.
One of the basic tenets of an insurance market is this: as risk goes up, so does price. This is common sense, but remember, we’re talking about California. Unlike those in the other 49 states, California lawmakers don’t think insurance companies should be allowed to pass the costs of reinsurance, the insurance companies purchase to protect themselves, on to policyholders. So, they passed a law making it illegal.
How price controls destroyed California’s housing insurance market - Washington Examiner
California lawmakers thought it was sensible to pass an economic policy that has been failing for more than 4,000 years.
www.washingtonexaminer.com