Why Major Insurers like State Farm are Leaving California?

As we gaze upon the Golden State, a peculiar phenomenon unfolds. Renowned insurer, State Farm, takes its bow from the California stage, leaving onlookers bewildered. But what catalyzed such a drastic action? To make sense of this departure, we have to sift through decades of legislative rubble that constructed a daunting fortress for insurers. From the dusty halls of the 1980s till date, several laws have encased insurance practices in a rigid frame. Insurers stare at this arduous edifice, helpless, lamenting their inability to adapt their operations to these statutes. An unfortunate consequence has unfurled - a mass exodus of insurers that bids goodbye to sunny California. State Farm's farewell has the industry murmuring, wondering who'll be next.

While observers struggle to untangle the complexities of this exodus, a quick glance at a seemingly harmless insurance ad pops up. It's Amica's newest pitch, oozing empathy, promising not just insurance, but compassion. This ad raises a skeptical brow. Isn't it peculiar that an industry, well-versed in crunching numbers, hedging bets, and turning a profit, suddenly advocates empathy? An industry that plays its cards well enough to ensure it thrives, regardless of the odds stacked against its customers. Despite their heartfelt campaign, an undeniable truth persists - Insurance, for all its empathy claims, remains a formidable money-making machine, skilled in the art of odds.

California, famously protective of its policyholders, has been under scrutiny following State Farm's dramatic exit. The Golden State's failure to account for the growing wildfire risks in their policies underlines this scrutiny. With its shield up, blocking insurers from considering climate change when setting premiums and discouraging rate hikes to cover wildfire risks, the state finds itself on shaky grounds. The crisis is evident - insurance premiums set far too low, forcing insurers to retract their coverage in the state. Now, more than ever, California finds itself grappling with its policies, recognizing the need for changes that can reconcile the interest of insurers and consumers alike.

#InsuranceExodus #CaliforniaInsurance #PolicyReform

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[kathleenwhite]

We owned a farm in Napa, in a private valley, 1000' in elevation, surrounded by woodlands. We had two buyers lined up 2 years ago, neither could get fire insurance. Chubb was no longer writing insurance because the 2017 fire went though our valley and wiped out every other house. In order to hedge their rebuilding costs, Chubb hired private firemen to go to the houses insured by Chubb and clear brush, clear gutters, and ultimately spray the house with chemicals to fireproof it if the fire was nearby and downwind. The only insurer left to insure our property for the new owner was State Farm. I can't even imagine the impact this is going to have.

[FYTfaEjYHNXjChexsxmCpNEtz]

Yeah, I don't want my insurance company to feel sorry for me and tell me how much they care about my feelings. I want them to pay me.

[poodlescone]

This clusterfuck will get worse. No insurance, no loans. Let's see how this will affect home sales in CA.

[czarekaj]

Forest fires in California are the result of piss poor forest management. When controlled burns are utilized, the undergrowth does not have a chance to become a fire hazard

[bobstupaksvegasworld]

Democrat supporting arsonists will be out in full force this fire season

[artisaprimus]

Imagine being an insurance company in a state that encourages lawsuits and avoids personal responsibility? How many fraudulent and frivolous claims do they plow thru in a year? Think about paying for repairs to business after a protest AKA riot. Reap the whirlwind, fools!

[bobbarker]

Companies do not stay where there is no profit,

[andrewharrington]

It won't just be house insurance. When the claims start coming in for medical negligence on transitioning, no one is going to offer insurance to doctors at a reasonable price. The most sensible route for insurance companies is to leave the market as the risk is likely to cost more than the profit.

[billkaldem]

Why any company would remain in California is a big mystery

[MarkRVillano]

I've heard that Allstate is likewise pulling the plug on new policies. California will soon be faced with the prospect of having to self-insure, but I doubt that the financial institutions will simply take their word for it, insofar as their ability to cover all losses throughout the state is concerned.
They are Woking themselves into oblivion.

[thomashogan]

It's brilliant.
"Hello, Antifa just fire bombed my corner grocery store, can you help me?"
"Of course we can. We feel your pain. We can't pay you for the damages or injuries to your employees but we sure will listen while you tell us how you feel about it."

[RebelsBestFriend]

If you try to clean the forests of all the dead wood the environmentalists sue. Now the forests have enough dead wood to carry a
huge damaging fire everywhere. My homeowners insurance here in Cali went from $1, 600 a year to $2, 100. A 25% increase. I are pissed!

[vincentawbrey]

Democratic "One Party" rule has destroyed this beautiful state, and this once Golden State has turned into a rust bucket.

[graselagrasela]

State Farm is one of the compassionate ones. When we had a car accident and a tree fall on our pool State Farm was there. No sooner had the claim settled when a letter came in the mail dropping us, and they didn't even say they were sorry.

[tacmason]

My Dad was a Risk Manager, and Insurance professional - so... I see this from Both sides of the equation. thank you for you very thoughtful handling of these details !

[beamreach]

Intentional. This is how the legislature puts together a state mandated insurance policy at more than 3X the standard market rate. (see the rates the owners in eastern hills, Santa Rosa, et al are paying after the fires) They make up for the deficit freefall by punishing ultimate goal.

[georgeawestjr.]

Just you wait until ALL insurance companies flee California. Get that popcorn🍿ready.

[jamibell]

Ok here’s the real reason for the forest fires, the Forest Service and the “environmentalist”.
I live in California by a forest (mammoth lakes) and if the above establishments had common sense and listened to the native Americans from the area they would’ve burned the land and kept the undergrowth and overgrowth in a healthy range. But they had to let it grow without keeping it contained. What can I say California has ruined itself.

[rfelllner]

They will give you empathy, just not any money.

[rogerrussell]

I've had great insurance coverage with fantastic local agents. But I never expected them to lose money doing it.