re: Insurance rates in the Palisades was cheaper than 97% of all US zip codes.

quote:

---

So what had the value that required the higher premiums in New Orleans? The filled in swamp land or the shitty home on top of it?

---

Higher premiums in new Orleans are a function of the risk (hurricane and flood).

quote:

---

Higher premiums in new Orleans are a function of the risk (hurricane and flood).

---

That's only a small part of the equation. As has been noted multiple times, CA used legislation and bureaucracy to limit rate increases, which lead to massive losses and insurers leaving the state. Louisiana (recently) and Florida took a different approach to maintain both insurance and healthy competition...if given a choice I would choose more expensive insurance than no insurance at all.

quote:

---

Florida and Louisiana face similar crises of insurance companies leaving the state due to regulatory burdens that prevent them from balancing risk exposure and charging premiums that reflect losses due. Instead of wildfires, their catastrophes are hurricanes, floods, and wind-related damage to below-sea-level development. Recognizing that a requirement that prohibits insurance companies from canceling existing policies discourages them from writing new ones, the governor of Louisiana recently signed into law a bill that would rescind this requirement (Lowrey, 2024). Florida, whose catastrophic hurricanes mirror those of Louisiana, recently enacted legislation to provide $200 million in grants for “homeowners to reduce their premiums by reinforcing their homes,” thus potentially reducing damage resulting from inevitable hurricanes and floods (Connolly, 2024). Fundamentally, this legislation acknowledges two principles that California would do well to learn: (1) regulatory mandates on the insurance market limit options and raise costs, and (2) state governments must partner with property owners to mitigate the risk from natural disasters.

---

quote:

---

So you're suggesting that the average actual structure/home in Pacific Palisades has a lower replacement cost than the 9th ward in NO?

---

No, I’m suggesting that the cost of a plot of land in PP relative to the cost of new home construction on that land is higher than the cost of a plot of land in the 9th ward relative to the cost of new home construction on that land.

quote:

---

5450 is cheap?

---

I would think it is based upon the average home value in that area.

quote:

---

He's right. The insurance premiums are largely based on rebuild costs.

A significant portion of the home value is the land, which is worth a shite-ton irregardless of a structure in place, and doesn't really play into the insurance premium.

---

Right. An empty lot in those areas would be more than 10 homes in the 9th ward

quote:

---

As has been noted multiple times, CA used legislation and bureaucracy to limit rate increases, which lead to massive losses and insurers leaving the state. Louisiana (recently) and Florida took a different approach to maintain both insurance and healthy competition...if given a choice I would choose more expensive insurance than no insurance at all.

---

There is insurance available, either through the state sponsored program or specialty "surplus lines" insurers that are not bound by California doi pricing regulations. What is true is the name brands have pulled out, so there's less insurance available and what is available takes a bit more effort to obtain.

Florida has their own insurance issues related to catastrophic losses. Numerous insurers have gone insolvent to the point of depleting the state fund, which has resulted in an additional assessment (which bounces between 1-2%) on all standard policies written in the past couple years. Despite all the fires and floods in California, the fund hasn't been depleted.

quote:

---

5450 is cheap?

---

That's dirt cheap.

Are you broke?

this is why State Farm left. They weren't allowed to charge a premium reflective of the risk.

And, after reading about the last resort insurer being upside down, apparently they just picked a premium for it that was politically popular.

This is liberalism in a nutshell. They don't address issues head on based on reality. They think they can manipulate everything with no consequence. From an economic standpoint, it's stuff like this. From a DEI standpoint it ends in people doing work they are unqualified for.

quote:

---

what kills me is all the people pissed at State Farm and a couple other insurance companies sayign they should not be able to cancel policies and leave the state

those companies went to the governor and said...hey we need to raise rates as the current risk of wildfires is too great and will bankrupt our whole company......cali gov said no so they left

how can people be pissed about that? seems like smart business decision and these people had 6+ months to find new insurance.

i dunno i dont get it.

---

Right. There are certain areas in some states (Louisiana being one) where the area is deemed unhabitable and uninsurable. You live there at your own risk.

quote:

---

You live there at your own risk.

---

Which I think is the way you have to do it to continue to get this under control. If it's a total loss you either don't allow people to rebuild in those areas or they do so knowing there is no insurance available.