re: I have a question on Fire Insurance Coverage and being dropped

Hey look the state farm agent is defending the insurance industry

I’m not defending anything, I’m sharing facts. If you can’t look at things logically instead of emotionally that’s on you.

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That’s why they dropped the policy. Actuaries told the companies what the price should be, and CA DOI said they couldn’t charge that price, so they dropped the risks or pulled out.

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Exactly! What sane person would loan their car for a weekend, to someone they know is a drunk, and has multiple DUIs? We all know how this story ends. Insurance companies saw the risk, California was unprepared, and they would not allow the insurance to be priced properly.

That being said, some dude who made the decision to not renew policies, has a big arse bonus coming!

Seek help.

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The insurance contract is priced properly, but that's based on a property that is not priced properly (but insurance would have to pay that inflated price if a claim was made).

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the insurance is mostly priced based on risk (eg. being in a brush or hurricane prone zone) and rebuild cost.

as discussed in the other thread, most of the value of these properties is the land they sit on, which doesn't have much impact on insurance premiums. the only thing it does is make it seem that insurance is "cheap" compared to the current market value of the home.

(no message)

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What if no company will insure you? Whether here or anywhere. Would someone really lose their home if citizens wouldn’t even write the policy?

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Supposedly the Cal state backed plan has a $2M policy max.

So if that’s the only option and you need more than $2M in coverage… that’s a problem

We can blame the residents for not having insurance to cover fires (and they should have, they took a big risk and lost), but I will point out that this board held a remarkably different view of the people in the Baton Rouge area who flooded in 2016 and didn't have flood insurance. Much more sympathetic and in emphatic in calling for government aid. And flood insurance in zone X is some of the cheapest insurance you can buy (far and away cheaper than the many thousands upon thousands of dollars that the residents of California would have had to have paid once the insurance companies pulled out). I'm just saying it's a lot easier to play the "sucks to be you, it's you're own fault" card when it's not your own friends, family and neighbors who have lost everything.

For the record, I don't personally know anyone effected by the fires, but as someone who has had friends and family who lost everything in floods and natural disasters in other parts of the country I'm still empathetic, regardless of location, politics, economic status, etc.

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Does replacement cost include the profit for the builder? A builder is not going to charge below market value to build a house. Or repair a house. They will scale up the profit to meet FMV

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Yes, replacement cost includes the cost to rebuild. I’m not sure where your point is even coming from

I’ve always wondered about here. When insurers pull out bc of hurricanes and if citizens won’t take you. Scary.