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Posted on 3/31/26 at 8:49 pm to notsince98
quote:
State Farm did nothing wrong. They warned everyone of the fire risk and when nothing was done they said they were out. Smart business.
Yeah I thought this was pretty well known that the state of California massively fricked the insurance companies so they decided they had to pull out because the state was too risky.
Insurance companies aren’t a nonprofit. Any responsible business would do a cost/benefit analysis and not stay in a state that is purposefully creating high risk scenarios.
Posted on 3/31/26 at 8:56 pm to back9Tiger
quote:
this and interest rates are a big driver on why housing is unaffordable.
30M illegal aliens aren't keeping prices low.
Neither are megacorps buying the single family home market into oblivion.
Posted on 3/31/26 at 9:25 pm to meansonny
quote:
They can't arbitrarily nonrenew policies.
In Florida they can
Is there some statute in California that prohibits that
Posted on 4/1/26 at 5:48 am to CaptainJ47
Yes. Between interest and insurance as high as they are they start mortgage payments monthly to be very high, especially for first time buyers.
Posted on 4/1/26 at 5:52 am to High C
quote:
Forced on us by law in most cases.
Only forced by law in healthcare but I get your point
Posted on 4/1/26 at 6:03 am to Ailsa
State Farm is notorious for underpayment. I'm amazed they've not been subject to a class action suit.
Posted on 4/1/26 at 6:18 am to notsince98
quote:
They didn’t insure any homes that were burned. They refused to provide coverage to customers that had been customers for many years. Some of those customers had not found new insurance when the fires happened.
I don’t know the situation specifically but insurance companies have to have their rates approved by the state. My guess is that CA wouldn’t approve the rates needed to insure against the fire risk there so they had to pull out of the market.
Also, how many of these people bothered to keep their values up to date with current construction cost? Underpayment can mean a lot of things.
This post was edited on 4/1/26 at 6:19 am
Posted on 4/1/26 at 6:18 am to back9Tiger
Thanks. I agree on insurance but disagree on rates. First, rates aren’t that bad at 6.5%. It is all about risk. The other thing is if interest rates do come down you will see a surge in buyers thus pushing the prices up because supply may not be there. It is a delicate balance in my mind.
Posted on 4/1/26 at 6:23 am to CaptainJ47
quote:
The other thing is if interest rates do come down you will see a surge in buyers thus pushing the prices up because supply may not be there. It is a delicate balance in my mind.
ZIRP for years is what got us into this mess and opened the door for PE to buy everything.
Posted on 4/1/26 at 8:31 am to dafif
quote:
quote:
They can't arbitrarily nonrenew policies.
In Florida they can
Well. That is wrong.
They still need to have a reason to non-renew in Florida. This is part of the florida department of insurance regulation.
Condition of the home is typically the main reason why policyholders are pissed about non-renewals (because it isn't claims related).
A company can pull out of a state entirely. That is a legitimate reason and happens quite a bit.
But as has been mentioned, State Farm to this day is still the largest home insurance provider in California.
They did not leave the state of california.
There are currently pending lawsuits against State Farm for knowingly under insuring the homes (again... state farm is insuring these homes in LA County too just like most other insurance companies).
The 2 main reasons why home rebuilding is not happening is because the county/city permit process is expensive and slower than hell (environmental testing) and the homes are under insured (mostly because of the city/county permitting requirements).
If your insurance policy only has enough money to build 60% of your home and you discover this during the permitting process, why would you begin to rebuild if you don't have the money to finish?
This post was edited on 4/1/26 at 8:32 am
Posted on 4/1/26 at 8:37 am to back9Tiger
quote:
How about we do something about insurance companies in general.
The only way to solve it is deregulation, competition and stop the monopolies from running the show.
Posted on 4/1/26 at 8:39 am to back9Tiger
quote:
How about we do something about insurance companies in general.
Yea. Lets do something about that nasty….checks notes….
Math and voluntary contracts
Posted on 4/1/26 at 8:42 am to back9Tiger
People have no idea regarding insurance companies and their societal rule.
Posted on 4/1/26 at 10:02 am to meansonny
quote:
Adam Carrola seems to think it is a combination of local zoning and permitting problems.
It's definitely that too. Buddy of mine is a real estate appraiser out there and has relationships with some of those in the Palisades who lost their homes. The permits are taking forever.
Posted on 4/1/26 at 10:02 am to notsince98
quote:
They didn’t deny paying customers. This is about the customers they dropped before the fires. They gave customers months warning before they stopped covering their homes so customers had time to get new insurance. State Farm said the fire risk was too high for them to insure homes in that area.
Found the State Farm employee.
Posted on 4/1/26 at 4:06 pm to meansonny
quote:
Well. That is wrong. They still need to have a reason to non-renew in Florida. This is part of the florida department of insurance regulation.
I am not sure what you do for a living or whether Florida is involved but I have many many years of directing involvement
In Florida a company can non-renew for this reason along with many many others
quote:
Company Strategy: The insurer is reducing exposure in Florida or exiting the market.
Also, for those in the industry what many companies do is set up a separate company for that single year so that if hurricanes hit they can shut that company down and reduce the risk and they will start a new company and take the good policies over and send the other policies somewhere else
This post was edited on 4/1/26 at 4:14 pm
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