Posted on 01/23/2025 11:15:41 AM PST by Angelino97
Here’s the California home insurance debacle made simple: No more bargains.
Property owners are keenly aware of the state’s numerous risks to their property, most notably wildfires. But they might be surprised to learn that California home insurance policies are among the nation’s cheapest.
How often do we say “low” regarding any Golden State housing cost?
Such thriftiness translated to California essentially asking insurers to take a high-risk gamble with low rewards. Would you make this bet?
Insurers knew it was a losing gamble, so they increased their odds of success by removing the highest-risk customers. That’s why so many Californians lost their home insurance.
Now, economics is rarely straightforward. Yet this crisis is a textbook example of what can occur when prices are kept too low: the supply of the product suffers.
Contemplate three yardsticks of property risk in the 48 states of the continental United States – an overall hazard ranking from CoreLogic, a measurement of insurance losses from PolicyGenius, and SmartAsset’s estimate of overall potential damages.
No surprise. California’s average score translates to the nation’s second-riskiest place for property owners.
Next, contemplate five measurements of annual home insurance premiums paid last year – from Nerdwallet, Insure.com, Bankrate, Value Penguin and Insurify.
Surprise! California’s average cost ranks as the ninth lowest among the 48 states.
Do you see a worrisome gap? Look at what’s charged in the 10 riskiest states, by this math, and what homeowners pay to cover an average $470,000 of damages from those hazards.
Florida homeowners live at the most peril and pay accordingly. Their typical annual premiums of $6,620 are the second highest of the 48.
Contrast that risk-rate mix to California, which is No. 2 on this hazards scorecard. Premiums across the state average only $2,080 yearly, No. 40 out of 48 states.
(Excerpt) Read more at dailynews.com ...
This will put downward pressure on CA home prices.
In the latter case, as soon as we get a new roof and siding, we will be self-insuring.
The kinfolk said
Jed, move away from there.
So they loaded up the truck
and moved out of Beverly.
Wildfires, mudslides, earthquakes,
regulations, leftist pols.
Equine feces. Both the Tubbs Fire in Santa Rosa and both fires in LA (Eton and Pacific Palisaides) were started by wildland fire, but proceeded as URBAN fires.
Mobile Homes are all the rage in California now...
California is really gonna take it in the chops when everyone who was hit with a 100 dollar parking ticket for parking next to an empty fire hydrant demands their money back.
Yeah, but you know they’re not getting their money back.
It’s still fun to think about. LOL.
The same logic behind California’s home insurance bloated regulations and the FAIR plan applies to America’s health-care system:
Cost shifting from high-risk, high cost and often no-money patients, to everyone else - and government, of course.
Yeah I’d be surprised if rates don’t skyrocket across the entire nation...
It would almost certainly be cheaper to create an “In case of fire” system for your home that ensured it was doused by your own water source, and built from fireproof materials.
It’s always better to not need insurance than to end up needing it. And if you take responsibility for your own fire protection, it may be cheaper too.
With the current politicians in power Insurance companies had better figure a 10year payback on policies.
There will be even more.
Mobile Homes can be moved in under 90 days, takes 7-10 years to build a house in California...
“Yeah I’d be surprised if rates don’t skyrocket across the entire nation...”
Gonna happen fer shur because that is what insurance is about-spreading the cost of individual losses across the policy holders as a group. So big losses in CA will be spread out over everybody else in the form of higher premiums. The smart insurance companies don’t sell policies in FL or CA.
Arson. We need death penalty for arson.
I’m glad my insurance company does not do business in California (or the Gulf Coast).
I must have had my California foothills home teleported to Florida. I pay over $7800 a year.
California comes in second.
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