Allstate joins State Farm, stops issuing new homeowners insurance policies in CA

The article says that the state has created an insurance product that people can buy if they can’t get insurance in fire risk areas - THEN that entity passes on losses to insurance companies who refused to insure that risk to start with! That seems like a great reason not to be in the fire risk business there. If the state thinks they can do it better, let them hold the risk.<p>Did, I misread that? Why would any company what to be in that space?

This is going to cause a collapse in the housing market, you can&#x27;t secure a loan without an insurance policy.

Seems like a textbook example of price controls causing a shortage and subsidies causing excess consumption.

Maybe a dumb question but let&#x27;s say they all pulled this stunt at once. All of the insurers. What happens? And what stops the insurers from dropping current CA homeowner policies?

Recent and related:<p><i>State Farm halts new property insurance policies in California</i> - <a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=36094633" rel="nofollow">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=36094633</a> - May 2023 (233 comments)

California is a quite dynamic state, geologically and meteorologically speaking. Floods, droughts, earthquakes and wildfires (along with the occasional debris flow) are a temporal reality in this state.<p>Nevertheless, insurance has been a reliably solid blue-chip investment sector for about a hundred years, hasn&#x27;t it?<p>&gt; &quot;To obtain accurate information about the average rate of return on insurance investments in California over the specific 1950-2000 period, you may need to consult historical financial records, insurance industry reports, or academic studies that focus on this particular time frame and geographic area. It is worth noting that past performance does not guarantee future results, and the climatic landscape has changed significantly since the 1950-2000 period.&quot;<p>Chevron profits still run this state, I wonder when that bottoms out?

Is there something CA is doing the lump all of CA and not just the people in the high risk zones? I mean a lot of east coast states have roughly similar flood&#x2F;hurricane issues on the coast or flood plain areas right? And they pay out and let them rebuild in the same area? Forgive my ignorance on it.

That seems like a pretty big deal, it could lead to a domino effect.

<a href="https:&#x2F;&#x2F;archive.is&#x2F;4Muud" rel="nofollow">https:&#x2F;&#x2F;archive.is&#x2F;4Muud</a>

As some people who&#x27;ve been following the conversation on climate change around 15 years back noted, it&#x27;s going to be the reinsurers and long-term value investors the ones who will be the agents of change for climate policy.

Sounds to me like these mega companies are expecting favorable regulation changes to give them more “freedom” (to reject valid claims).<p>Either that or they’re wanting a tax-payer funded bailout.

The cat is out of the bag on globalism ending. California has started their decline for the first time ever. I dont blame them at all for withdrawing from CA.

Appropriate response is for the state to offer insurance as competition instead of letting them try to coordinate extortion of us all.