State Farm ceasing new applications in California for property insurance, other policies

[GON]

Here is a interesting article on flood insurance. The entire article is well worth a detailed read. Here are two paragraphs from the article.


NFIP does not charge nearly enough to cover the expected costs of its liabilities. The assessments are not sufficient to build any buffer to cover an extraordinary year, such as what occurred with Hurricane Katrina in 2005 or Hurricane Sandy in 2012. Because homeowners don’t incur the full cost of building in a flood zone we end up with more houses there than if homeowners incurred the full cost of the flood risk, which exacerbates the government’s costs in the next disaster. Since 1970, the number of Americans living in FEMA-designated Special Flood Hazard Areas has increased from 10 million to over 16 million today.

The optimal solution would be for the government to get out of the flood insurance business entirely and leave it to the private market, which would
endeavor to accurately measure risk and charge a price for its insurance that covers the expected costs.

The government's hidden housing subsidy for the rich

It's time to reform the flood insurance program.

www.politico.com

 

[flash7210]

The optimal solution would be for the government to get out of the flood insurance business entirely and leave it to the private market, which would
endeavor to accurately measure risk and charge a price for its insurance that covers the expected costs.

The optimal solution would be to NOT BUILD in areas prone to flooding

 

[GON]

The optimal solution would be to NOT BUILD in areas prone to flooding

If one can afford the risk, it is up to them. It should not be by involuntarily taking to money from people not in flood areas to pay the monies to mitigate the risk for those that make the choice to live in flood areas.

 

[PimTac]

The optimal solution would be to NOT BUILD in areas prone to flooding

That should be a personal decision. Anyone who builds should know what are the environmental risks such as flooding, fire, landslides, etc. If they decide to go on and build then they have accepted those risks and the extra insurance costs that come with them.

 

[DwightFrye]

I had GEICO insurance policies on my vehicle and condo for probably 15 years. I lived in a high fire danger zone, I had to evacuate twice while living there, the first time the fire came within 1 block of my house and burned over 300 homes in my neighborhood.

In 2019 I moved up to the mountains here in Southern California, also a high danger zone. I called GEICO to get a new policy on my home and revise the address on my car. They refused to write a policy on the house. Farmers was the only one that would but that did not cover fire. I had to go through a State sponsored fire insurance exchange system to get an additional policy just for fire. My homeowners insurance including the fire coverage is now 3X what it cost in my previous city which was also a high fire danger zone. And my fire policy increased over $175 this year.

I understand that most of the insurance companies in my former city are now refusing to provide coverage for condo complexes. Previously the owners of the units would have homeowners policies to cover the contents and the HOA had a policy to cover the structure and the rates were part of the HOA dues.Some HOA's are now saying that in order to find an insurer that will provide fire insurance on the complex they will have to raise the HOA dues over $400 per month.

As much as I detest government involvement in things, this is a case where a solution is going to have to be provided since the private market insurance companies are refusing to cover the homes of thousands of homeowners.

 

[alarmguy]

Ok

So your solution is to abandon all of California? Because that is what the OP's link is talking about - the issue is for all homeowners in CA, not a small number of high risk properties - similar issues in Florida. I guess I don't care I don't live there. Seems there might be a better solution than abandoning several states?

Absolutely! You can use the word "abandon" if you chose.
State Farms solution is to stop writing home insurance policies in CA. What is wrong with that? (dont answer *LOL*)
There is nothing wrong, its a business decision in a free country (so far) that it's not worth writing home insurance policies there or anywhere they decide to get out of that business.

ITs been like this forever in ANY high risk area, but now we have the internet and social media to debate it. Countless insurance companies stopped writing home insurance in other states like Florida and EVERY insurance company in the country has areas of states it will not insure, its business. We live in a free country everyone who needs insurance has it BTW and if not they have to move someplace else, its not the people who live in safe areas job to cover massive losses of those who chose to live elsewhere.

Not sure what the big deal is, they are just one company out of many and if it was a serious issue then let the state of CA figure out its problems and address it. It's not up to a company to solve state problems. Florida handles this stuff all the time.

Here right above my post is the solution, CA offers state fire insurance. There you go, written by someone that has it.

 

[zzyzzx]

The optimal solution would be to NOT BUILD in areas prone to flooding

Or not build slab houses in flood prone areas. It seems like every flood prone areas only has them. Houses that don't have basements should have at least a 3' crawl space for ease of maintenance and some flood protection.

 

[SC Maintenance]

Absolutely! You can use the word "abandon" if you chose.
State Farms solution is to stop writing home insurance policies in CA. What is wrong with that? (dont answer *LOL*)
There is nothing wrong, its a business decision in a free country (so far) that it's not worth writing home insurance policies there or anywhere they decide to get out of that business.

ITs been like this forever in ANY high risk area, but now we have the internet and social media to debate it. Countless insurance companies stopped writing home insurance in other states like Florida and EVERY insurance company in the country has areas of states it will not insure, its business. We live in a free country everyone who needs insurance has it BTW and if not they have to move someplace else, its not the people who live in safe areas job to cover massive losses of those who chose to live elsewhere.

Not sure what the big deal is, they are jsut one company out of many and if it was a serious issue then let CA figure out its problems and address it. It's not up to a company to solve state problems.

I actually agree. Its state farms prerogative and its not their job to solve, and even if they wanted to the likely couldn't solve it. Doesn't mean its not solvable.

One of the reasons North Carolina has some of the lowest auto insurance rates in the country are due to the North Carolina Reinsurance facility - which is a state mandated and controlled re-insurance program that all insurers must participate. It pools the overall high risk across all the providers and makes insurance cheaper for everyone. https://www.ncrb.org/ncrf/

The largest health insurance provider for working people in the state of South Carolina is - the state of South Carolina. All state, county and city employees and their families can participate. The state underwrites the program, and hands the entire administration of it over to Blue Cross. The state saves money, the people get good health insurance, and Blue Cross doesn't have to hedge for the risk. https://www.peba.sc.gov/

Insurance is socialist on its face. A large number of people pay a small premium each year, and a small number of people with significant losses are covered. A private / public partnership can work well if you leave politics out and let it be managed properly.

 

[SC Maintenance]

Or not build slab houses in flood prone areas. It seems like every flood prone areas only has them. Houses that don't have basements should have at least a 3' crawl space for ease of maintenance and some flood protection.

Raised slab is the newest incarnation and seems to be the best option so far. All the new houses in this area are raised slab construction.

A slab is much better protection against termites than a crawl space. Termites are a huge issue in the south.

Basements are not really feasible due to the high water table.

 

[zzyzzx]

Raised slab is the newest incarnation and seems to be the best option so far. All the new houses in this area are raised slab construction.

A slab is much better protection against termites than a crawl space. Termites are a huge issue in the south.

Basements are not really feasible due to the high water table.

 

[SC Maintenance]

You still end up with a open space under your house that starts below grade - so it will always be damp / full of water unless your running a pump and dehumidification.

 

[alarmguy]

I actually agree. Its state farms prerogative and its not their job to solve, and even if they wanted to the likely couldn't solve it. Doesn't mean its not solvable.

One of the reasons North Carolina has some of the lowest insurance rates in the country are due to the North Carolina Reinsurance facility - which is a state mandated and controlled re-insurance program that all insurers must participate. It pools the overall high risk across all the providers and makes insurance cheaper for everyone. https://www.ncrb.org/ncrf/

The largest health insurance provider for working people in the state of South Carolina is - the state of South Carolina. All state, county and city employees and their families can participate. The state underwrites the program, and hands the entire administration of it over to Blue Cross. The state saves money, the people get good health insurance, and Blue Cross doesn't have to hedge for the risk. https://www.peba.sc.gov/

Insurance is socialist on its face. A large number of people pay a small premium each year, and a small number of people with significant losses are covered. A private / public partnership can work well if you leave politics out and let it be managed properly.

Good posts though the North Carolina program is auto insurance for high risk drivers. Many states have that and the insurers still make money on them. Im not sure what you mean by low cost unless you can show me factual data I would not believe the high risk pool is cheap by any means. I know because I grew up in NY. All the "pool" required is I can not be denied coverage, put in a pool of other high risk drivers and paid sky high premiums but I could not be denied.
All young adults in New York start out in the high risk pool, mandatory that insurers have to cover them but the cost is not low by any means, the cost is sky-high.

South Carolina is merely providing insurance for their employees as many states do. Its not for the people of South Carolina.

We are all over the place as we were talking homeowners insurance. I understand your using examples but its not

 

[alarmguy]

Raised slab is the newest incarnation and seems to be the best option so far. All the new houses in this area are raised slab construction.

A slab is much better protection against termites than a crawl space. Termites are a huge issue in the south.

Basements are not really feasible due to the high water table.

It's almost impossible to detect termites in a slab vs crawl space which is easy as you can get under the house and if found treat easy.
It was a HUGE problem in Levitt Homes on Long Island, Still is.

Since the homes are on a slab termites can enter anyplace there is a almost microscopic crack or space in the slab since this can even be the center of the home its hard to sometimes impossible to detect and treat before damage is significant.

A crawl space home is easy to detect and treat, one just need inspect the pilings and if if treatment needed, can treat around the pilings. More or less, you have full access under a home to treat and inspect. With a slab, it's completely unknown.

I know a lot about this, I live right near a major termite issue for decades, the slab built Levitt homes of Levittown NY. IT was always in the news. I had a basement in my parents home, many (law the middle and high school) of my friends slabs, some people in the termite business (this was before more modern treatments) made sure to let homeowners know that they can not guarantee their work being its a slab.

I know all the termite talk down south here. Just remember I lived up north for 40 years, the sandy soil of Long Island was a termite haven compared to the thick mud and red dirt of much of North and South Carolina but I do read its an issue here, jsut haven't seen it. They are a problem everywhere but if you have a slab it is much harder to treat and discover because you can not get under the house, you are literally treating a home "blind"

I quickly pulled this off the internet, didnt put much effort to look for anything else, but this explains it. The termite thing you will be able to confirm regarding slabs if interested. They are a nightmare, turned me off when first moving here but then realized it cant be as bad as where I grew up. I do my own preventive treatments. Sold our slab home of 15 years 11/2022 never had a termite bond and buyers inspector found no trace of them. Im like the only person I know in the south that isnt sold a termite bond nor ever to have an exterminator *LOL*

Anyway, its true concrete stops termites except any crack about the size of the thickness of a credit card allows entry and wow. When we were looking at dozens and dozens of homes at the time only the foundation was poured we were discounting dozens of homes because of all the cracks, many times the cracks run from one end of the slab to the other. Its shocking really.
Florida was horrible for them and it wasnt really much better in North and South Carolina. These production builders take no steps in preventing termites, I was shocked at how, even tiled floors could be laid on some of these homes.
I would say, if it was properly done (which it isnt) according to the information online, then a slab can be effective but try to find one builder anyplace that adheres to that.

Treating Termites Under Slab: An Overview Of Steps And Tips For Prevention | Mast Producing Trees

mast-producing-trees.org

Another quick description ... and now have to leave this place for the day *LOL*

How to treat termites on that are coming up through the slab inside of a home - Proactive Pest Control

Many times we have come across homes that have termites coming up out of slab floors in the interior parts of a home. These slabs can have any type of…

proactivepestga.com

 

[Rmay635703]

Florida homeowners insurance companies are insolvent...a bad situation with no answers of yet.

Bi annual floods and hurricanes make for an argument that insurance no longer exists and you are on your own.

Weather is causing folks to leave certain parts of the country, dry wells being much of the reason

The optimal solution would be to NOT BUILD in areas prone to flooding

Homes that are flood and hurricane proof can be built, remove the ability to insure and you might see homes built on concrete pillons

 

[CarDoc66]

Developers will plant a house anywhere they can. When I purchase a home I look at the location and surrounding areas as to limit my exposure to disaster. This seems to be such an issue lately that insurabilty of specific regions needs to be a consideration when buying/building a home.

 

[Zee09]

Bi annual floods and hurricanes make for an argument that insurance no longer exists and you are on your own.

Weather is causing folks to leave certain parts of the country, dry wells being much of the reason



Homes that are flood and hurricane proof can be built, remove the ability to insure and you might see homes built on concrete pillons

Fire is an issue that bothers me.
Yes you can avoid wild fire zones but man made ones you can't... Like electrical etc .
Even the fool who smokes in bed and takes out a few neighbors in the process.

For those with mortgages the banks better figure the insurance issue out as it's their investment.

 

[Zee09]

If my house is destroyed my insurance dictates I rebuild it on said property again...

I wouldn't want to. But I have to and then I can sell it and move on. I assume this is a built in safety step to avoid arson but really dumb.. if it really is arson I doubt you are going to get away with it.

What you see from insurance companies is a bunch of smoke and mirrors...

 

[y_p_w]

I had GEICO insurance policies on my vehicle and condo for probably 15 years. I lived in a high fire danger zone, I had to evacuate twice while living there, the first time the fire came within 1 block of my house and burned over 300 homes in my neighborhood.

GEICO is actually a full-on for-profit though, unlike State Farm.

But it was really weird with me. I've changed insurers several times when the rates just went up. I was originally buying from Farmers agent but it was through a different company using Farmers as an intermediary. She told me that it was the best rate she could get since my home didn't have circuit breakers. I got bills from Farmers but the bill itself said that I needed to make the checks payable to some company I'd never heard of, even though it went to a Farmer's mailing address in Southern California.

After a while it just kept on going up and up and then finally I switched to a much cheaper policy with AAA, where they were the direct insurer. And that kept on going up until I actually got a decent rate through GEICO, who also provides my vehicle insurance.

I do remember when my vehicle insurance was with Progressive and I asked about maybe home insurance. But after a little bit of research I was told that they didn't provide direct home insurance at all and they didn't serve as a broker for any California home insurance.

 

[dishdude]

No one wants to pay for insurance but if they have a catastrophic loss they're sure happy to have it. I'm fine paying in and hoping to not have to use it.

 

[GON]

No one wants to pay for insurance but if they have a catastrophic loss they're sure happy to have it. I'm fine paying in and hoping to not have to use it.

The question is if the citizens of the USA are ok having ma and pa American subsidizing and being liable for high risk properties, when lower risk properties are available to the people purchasing high risk properties?

The country is at unsustainable debt, deficit, liability, and entitlement levels in part because we want someone else to pay directly or indirectly for our lifestyles.