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State Farm Insurance will no longer sell property insurance in California.

1 by highdesert
State Farm is stopping the sale of new home-insurance policies in California effective Saturday, because of wildfire risk and rapid inflation in construction costs. The move by one of California’s biggest insurers is a blow to the state’s efforts for years to maintain a vibrant market for homeowners in the wildfire-prone state. Nationally, inflation has been a serious problem for home and car insurers since last year, and many have posted underwriting losses as they continue to seek regulatory approvals for rate increases that they say they need for catching up with the surging costs.

State Farm is the nation’s biggest car and home insurer by premium volume. It said it “made this decision due to historic increases in construction costs outpacing inflation, rapidly growing catastrophe exposure, and a challenging reinsurance market.” It posted the statement on its website and referred questions to trade groups. The insurer’s move doesn’t affect existing home-insurance policyholders, whose policies will remain in effect, according to the statement and a representative of the state Department of Insurance. The insurer said it would also quit accepting new applications for business policies, but it would continue selling new personal auto policies.
https://www.wsj.com/articles/state-farm ... a-5748c771
https://archive.fo/ID57t

According to the CA Insurance Commissioner, State Farm has the largest share of the property and casualty insurance market in CA.
https://www.insurance.ca.gov/01-consume ... evised.pdf
"Everyone is entitled to their own opinion, but not their own facts." - Daniel Patrick Moynihan

Re: State Farm Insurance will no longer sell property insurance in California.

2 by featureless
The family property has had fire insurance on 4 houses (two real houses and two that need significant modernization). 5 years ago, it was around $6k for all. $35k this year. Most insurance carries just say no. Seems this will absolutely wreck the housing market as well as totally devistate areas that do burn. The increases are totally unaffordable. It happening in OR and WA as well.

Re: State Farm Insurance will no longer sell property insurance in California.

3 by Wino
Typical of State Farm - take the money, then run when nature (or PG&E) runs amok. I had SF years ago until I caught them totally screwing me on premiums (my fault). They once cancelled my homeowners policy because they said I had two "vicious" pit bulls - both actually Boxers that made great noisy watchdogs, but were more apt to party down if someone breached the backyard or house. Turns out that a rep had rattled my backyard gate and the pair went ape shit as good watch dogs do. I ended up having to get notarized affidavits stating the dogs were gentle, not pit bulls or vicious from vets and others. Pissed me off enough to start shopping for another firm and discovered how badly they were jabbing me on premiums. It did teach me to shop insurance at each renewal and quit being lackadaisical and trusting or too busy to bother.
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Re: State Farm Insurance will no longer sell property insurance in California.

5 by tonguengroover
Ya think people would realize the benefits of fire proofing your home if you live in the sticks. Like no wooden roof shingles. Clearing an area around the home. Sealing off the eaves so sparks don't get blown up against the bottom of the overhang.
And don't get me started on hurricane alley. Overhangs are notoriously bad in hurricanes as well as they catch the wind and pow, there goes the roof.
If it was me I'd not insure anything in Florida.
“The only thing necessary for the triumph of evil is for good men to do nothing,”

Re: State Farm Insurance will no longer sell property insurance in California.

6 by YankeeTarheel
tonguengroover wrote: Sat May 27, 2023 11:17 am Ya think people would realize the benefits of fire proofing your home if you live in the sticks. Like no wooden roof shingles. Clearing an area around the home. Sealing off the eaves so sparks don't get blown up against the bottom of the overhang.
And don't get me started on hurricane alley. Overhangs are notoriously bad in hurricanes as well as they catch the wind and pow, there goes the roof.
If it was me I'd not insure anything in Florida.
If the fire is hot enough, even concrete wall won't stand. My friend's house had masonry walls and a tile roof. It burned right through heavy beams and the shell of the house was filled with broken tiles.
Wildfires can be far more intense and destructive than house fires as they make their own weather as well.
Maybe they should follow the "wisdom" of TOS and rake all the forest floors. :sarcasm:
"Even if the bee could explain to the fly why pollen is better than shit, the fly could never understand."

Re: State Farm Insurance will no longer sell property insurance in California.

9 by Eris
I hate to say it, but this is probably an unavoidable step. For years now people have been building houses in areas that shouldn't have them and now that the climate is heating up we are seeing exactly why those areas should have been avoided in the first place. If ever there was a case of the inivisible hand of the market correcting a problem in the economy, this is it.
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Re: State Farm Insurance will no longer sell property insurance in California.

10 by highdesert
You're right Eris and we've talked about it before here. Local zoning and development boards are just greedy for $$$$$ - tax revenue. More wildlife are entering developed areas, bears, mountain lions, wolves...because their hunting areas keep getting compressed. AIG (American International Group) an insurance carrier stopped writing property insurance policies in CA last year and now State Farm today, I expect we'll see more exiting.
"Everyone is entitled to their own opinion, but not their own facts." - Daniel Patrick Moynihan

Re: State Farm Insurance will no longer sell property insurance in California.

11 by featureless
Eris wrote: Sat May 27, 2023 6:46 pm I hate to say it, but this is probably an unavoidable step. For years now people have been building houses in areas that shouldn't have them and now that the climate is heating up we are seeing exactly why those areas should have been avoided in the first place. If ever there was a case of the inivisible hand of the market correcting a problem in the economy, this is it.
You're not wrong. Two problems with the current approach of market force vs managed retreat: 1) it will devastate communities where natural disasters hit with no ability to rebuild or resources to relocate. 2) it will push more and more people to places that are (currently) deemed insurable crowding out lower incomes and increasing the cost of housing.

Climate migration is a thing and will get worse. What we're doing by allowing free market forces to control the issue is ensuring it will be total chaos. But what's new?

Re: State Farm Insurance will no longer sell property insurance in California.

12 by papajim2jordan
Infinite need on a finite planet. Fires occur naturally, but also floods, hurricanes, drought, large asteroid impacts, Ebola, humans. Do we expect big rocks to steer clear and fire to say, oh, there's houses over there. let's be careful? Insurance companies react as they do because humans act as they do. At an early age, people learn about fire and what it can do. Would you build your house on a swamp? An unstable rock cliff? How bout an active volcano? I guess that's why lottery tickets sell so well.
?

Re: State Farm Insurance will no longer sell property insurance in California.

13 by highdesert
Yes, people choose to live in heavily forested areas, forest fires can be very intense, fire suppression services are finite. Defensible space is a logical technic but it doesn't guarantee your house won't burn. Forest fires are natural especially in old growth areas, like the phoenix new growth arises.

Despite CAs attempt to control insurance prices, I expect we'll see the number of property insurance carriers getting smaller. My home insurance has gone up even though I'm in a desert area.
Last edited by highdesert on Sun May 28, 2023 9:50 am, edited 1 time in total.
"Everyone is entitled to their own opinion, but not their own facts." - Daniel Patrick Moynihan

Re: State Farm Insurance will no longer sell property insurance in California.

14 by sikacz
featureless wrote: Sat May 27, 2023 8:53 pm
Eris wrote: Sat May 27, 2023 6:46 pm I hate to say it, but this is probably an unavoidable step. For years now people have been building houses in areas that shouldn't have them and now that the climate is heating up we are seeing exactly why those areas should have been avoided in the first place. If ever there was a case of the inivisible hand of the market correcting a problem in the economy, this is it.
You're not wrong. Two problems with the current approach of market force vs managed retreat: 1) it will devastate communities where natural disasters hit with no ability to rebuild or resources to relocate. 2) it will push more and more people to places that are (currently) deemed insurable crowding out lower incomes and increasing the cost of housing.

Climate migration is a thing and will get worse. What we're doing by allowing free market forces to control the issue is ensuring it will be total chaos. But what's new?
Agree with both comments. Additionally diverting natural resources like water from one area to another is not a great idea even though it made areas very prosperous, it took away from the source areas as well. Need better planning and controlled building which should set limits on an areas natural sustainable levels.
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Re: State Farm Insurance will no longer sell property insurance in California.

20 by highdesert
sikacz wrote: Sun May 28, 2023 5:41 pm
sig230 wrote: Sun May 28, 2023 5:31 pm DC.

Swamp land that was so deadly that at times everyone who could left.
Oddly cities on swamps were not that rare.
Yes, "...London, Paris, St. Petersburg, Berlin, Chicago, Boston, New York, New Orleans, Toronto, and Venice." Even Rome was built on swampy marshlands.
https://www.bloomsburycollections.com/b ... e%20built.

Yes those silly boys at "Monty Python and the Holy Grail":
http://montypython.50webs.com/scripts/H ... cene13.htm
"Everyone is entitled to their own opinion, but not their own facts." - Daniel Patrick Moynihan
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