Posted on 02/03/2025 9:07:00 PM PST by Red Badger
22%?! Chickenfeed!
I’m in AZ, near Phx, and Progressive almost tripled my home insurance premium this month.
California and Florida have the same problem with home owners insurance. Insurance companies either raise their rates to the Moon or they leave the state entirely. The risk is too much for them to bear without a premium that gives them a reasonable expectation of a profit and not go bankrupt if a major disaster hits, like a Cat 5 hurricane in Florida or a 8.0 earthquake in California. Other Gulf and Atlantic states and earthquake prone states are in the same situation.
The ‘problem’ is not too little insurance, but tooo much insurance.
There may be dozens of insurance companies in any given state that will insure a number of homes for disasters, but if a major disaster hits that state and a large majority of a particular insurance company’s customers are suddenly seeking to have their homes rebuilt, the company cannot meet their obligations for all their policy holders. That is why State Farm and others are leaving the state, because they cannot insure everybody and pay off everybody if a major disaster hits.
My suggestion is to get rid of all home insurance companies and have just one insurer that everybody pays into, even commercial property owners should be able to as well.
The one insurance entity would be a quasi-governmental agency that would have all the functions of a commercial insurance company, but the funds would be invested in various stocks, bonds etc, to earn interest on the principal year after year. They could be invested in building material manufacturers, retail sellers like Lowes and Home Depot, brick and cement manufacturers, construction companies and all kinds of things that are necessary to rebuild a home. That way when disaster hits, the insurance entity can negotiate price reductions for materials and provide the materials to the homeowners contractors, similar to what car insurance companies do with cars that need repair after an accident.
Yet they continue to be able to pay Patrick Mahomes millions a year as a spokesman.
They can get the hike on one condition: They bring back the White Jake From State Farm.
That’s entirely antithetical to a free market, and it’s the exact opposite of what should happen after a “disaster hits.” In times of crisis, government price-fixing, freezes, anti-gouging, whatever you want to call it, invariably will lead to shortages.
And the central planning required of the singular “quasi-governmental agency” are too much; they will not be able to keep up with the infinite variables and changes in a free market. That’s why capitalism is more efficient and more successful: all those decisions are spread out amongst everyone in the market, not the anointed in an ivory tower who are supposedly tasked with looking out for other people’s interests. They have no one else’s interests at heart; they’re human.
Granted, insurance isn’t exactly a “free market” in America, but nothing else really is either.
The staffing of the entity could be awarded via sealed bids to real insurance companies for 5 years at a time, just like the military here does with its maintenance and operation of its testing facilities. A former neighbor worked for several different companies during his time as a test technician on base, RCA, BAE, Vitro, Marconi etc. ........
What’s funny is the state insurance fund, FAIR, raised its rates drastically, but it is not news when the state does it. Also, there’s a good chance the LA fires will break the state insurance fund.
State Farm cancelled home owner policies in my area by harassing home owners with drone footage demanding rooves be replaced in order to renew. Who’s going to pay to replace a roof that’s not leaking and has many years of service left? Oddly enough, the area I live seems to be a much better risk than California.
Perhaps I’m abnormal
but the only reason I buy insurance.
is for liability.
That is to protect myself from
all the idiots we live with.
I can build a house from scratch
cheaper than a Human treated in
a hospital for 5 days.
House means nothing, I can build another.
As$hole in a courtroom is a lot more expensive!
“My suggestion is to get rid of all home insurance companies and have just one insurer that everybody pays into, even commercial property owners should be able to as well.”
This is the exact opposite of how to spread risk in a fair manner, this is how the people of the uppermost will get screwed by coastal who continue to rebuild in hurricane zones, beach houses that the rest of us rebuild 4 times in 25 years. The cost of the current claims in California are minuscule compared to what Florida faces almost yearly in wind and wave damage. It is a big fire number but a tiny loss in the reinsurance market.
What we will find the structure loss in the pacific palisades will be much LOWER than intial estimates. The insurance companies will rightly claim a property is worth x dollars per square feet and x square feet were lost, no matter how nice the area around the pool was, or how nice the weather of the lot or how good the local economy was, the cost to reconstruct in a normal market is what the paid claim will be.
It is all about on defines loss.
Just because they paid out claims doesn’t mean tney are losing money.
Time for California to start paying their fair share and not expect the other insured in the rest of the 50 states to cover the cost of their politics.
Insurers are nothing but anti- capitalist middlemen. Regardless of the industry, healthcare, auto, home.. they specialize in creating bureaucracy that rakes in cash and pays very little. They can fudge their numbers all they want. Sit down and calculate how much you paid, versus how much they really paid. Not their little gimmicky numbers, but the “negotiated prices”.
Insurance should be available to purchase from any insurance company, from any state. Should never be mandated. Should be available to purchase and cancel at anytime.
They keep prices of everything artificially inflated.
my homeowners doubled in the last year
not State Farm
no claim ever
but probably because I can see Mexico from my house
2. An insurance policy is a CONTRACT, which means it is governed and regulated by state law. That’s why you can’t buy insurance from a company in another state.
3. You can eliminate “health insurance” from any discussion of the subject. That’s not real insurance, but an over-regulated racket where the mechanisms for measuring and pricing risk have been REMOVED.
Incompetent government in the form of no water in aqueducts, no water in large reservoirs, broken down fire equipment stuck at the repair depot, fire leadership selected for lesbianism instead of ability to manage a large fire department, and more, all are all coming home to roost.
Also, this would be a good time to (re)read Kipling’s The Gods of the Copybook Headings. For the Left, it would mostly be for the first time.
https://en.wikipedia.org/wiki/The_Gods_of_the_Copybook_Headings
The Gods of the Copybook Headings with terror and slaughter return!
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.