Octopus Overlords

The insurance giant State Farm, America’s biggest car and home insurer by premium volume, will halt the sale of new home insurance policies in California, citing wildfire risk and inflation of construction costs.

Starting on Saturday, the company will not accept insurance applications for business and personal lines property and casualty insurance. The company will still accept auto insurance applicants.

“State Farm General Insurance Company made this decision due to historic increases in construction costs outpacing inflation, rapidly growing catastrophe exposure, and a challenging reinsurance market,” the company said in a statement.

Isgrimnur wrote: ↑Sun May 28, 2023 1:50 pm It’s almost as if for-profit insurance is a pyramid scheme.

Smoove_B wrote:Exactly. You can't expect insurers to intentionally take on the risk. Just like flooding and how the federal government subsidizes and/or provides insurance for some areas, there might need to (real soon) be a supplemental wildfire policy that's backed by the feds.

BUT we also need to do a better job of mitigating hazards in the short term (like not letting people build back in flood and fire zones) while also enacting longer term policies to lower risk of catastrophic events happening in areas that people want to convert to housing or businesses (zoning, environmental laws, raking the woods, etc...)

So it's dealing with what's already out there (the homes currently at risk) while simultaneously not allowing future risks to emerge (which is what State Farm is currently enacting by refusing to insure new projects).

Pyperkub wrote: ↑Tue May 30, 2023 10:17 pm Fire insurance is mandatory for a home loan as I recall....

Smoove_B wrote:

Pyperkub wrote: ↑Tue May 30, 2023 10:17 pm Fire insurance is mandatory for a home loan as I recall....

Yeah, if you're building a new one. Or trying to re-finance an existing one. That's why State Farm is saying they're no longer issuing new policies. And I'm sure existing policies in wild-fire areas are going to experience price increases.

Zarathud wrote: ↑Wed May 31, 2023 8:49 pm That’s the market correcting. You can take the risk but can’t pass it on because insurers don’t view the world through politics.

A second national insurance company is no longer providing coverage to new customers in California, citing rising costs.

Allstate quietly stopped issuing property and casualty coverage to new California customers last year. The company made the announcement in November during its 2022 third quarter earnings report, Allstate spokesperson Brittany Nash said in a statement. The company will offer continuing coverage to existing customers.

"We paused new homeowners, condo and commercial insurance policies in California last year so we can continue to protect current customers," the statement said. "The cost to insure new home customers in California is far higher than the price they would pay for policies due to wildfires, higher costs for repairing homes, and higher reinsurance premiums."

Farmers Insurance Group is no longer writing new property insurance policies in Florida, the company confirmed to News 6 on Friday.

A memo sent to agents and obtained by News 6 shows Farmers instituted a restriction on writing new policies in the state, effective Feb. 1.

“In Florida especially, we’ve seen a mix of various unique challenges, and catastrophe costs are at historically high levels,” the memo said. “Housing prices are increasing, and inventory supply and demand, lumber prices and costs of labor are contributing to the increase. These issues also are increasing the costs of claims, which in turn drives down profitability.”

Unagi wrote: ↑Thu Jun 15, 2023 5:29 am Why would they suddenly take on an insurance role?

LawBeefaroni wrote: ↑Sat May 27, 2023 10:06 pm
I assume federal relief will allow Californians to continue to build in firebreaks?

Farmers Insurance will stop writing new business and not renew its existing “Farmers-branded” automobile, home and umbrella policies in the Sunshine State, the company said Tuesday.

On Monday, Farmers sent notice of its plans to the Florida Office of Insurance Regulation, which is reviewing it. Insurers must give the office 90 days' notice if they want to discontinue writing business in Florida.
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The move will impact 30% of the company's business in Florida, or roughly 100,000 policies. Policyholders affected by the decision are required to be given 120 days' notice that their coverage will not be renewed.
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Policies under its other brands such as Bristol West, Foremost Signature, Farmers GroupSelect, Foremost Choice and Foremost-branded policies will not be affected.

This marks the latest stumble into instability for Florida’s property insurance market. Seven Florida property insurers were declared insolvent in the past 18 months, and another 15 have stopped writing new business in the same time period, Friedlander said.

AAA will not renew the auto and home insurance policies for some customers in Florida, joining a growing list of insurers dialing back their presence in the Sunshine State amid a growing risk of natural disasters.

"Unfortunately, Florida's insurance market has become challenging in recent years," the company said in a statement emailed to CBS MoneyWatch. "Last year's catastrophic hurricane season contributed to an unprecedented rise in reinsurance rates, making it more costly for insurance companies to operate."

AAA declined to say how many customers won't have their policies renewed, saying only that the change will affect "a small percentage" of policy holders.

Blackhawk wrote:Seven weeks. This thread is seven weeks old, and we've gone from, "Huh? They did what?" to an avalanche.