State Farm Will No Longer Sell Insurance Coverage For New Homes In California
Insurance is getting harder to obtain throughout the Sierra Nevada region, according to Ryan Tompkins, a forester and natural resources adviser with the University of California. “Many of our communities in rural, forested areas of California are experiencing not only increasing wildfire and increasing wildfire severity, but also increasing insurance problems.They’re getting dropped. They’re getting non-renewed. We’re seeing a sort of insidious, quiet impact economically.
There is an old expression that says the insurance business model is to sell coverage and then deny liability. Insurance companies often are their own worst enemies, as they force their policyholders to jump through hoops to get the benefits they are entitled to. No one holds onto a dollar bill tighter than an insurance company. But to be fair, they are in business to make money. If they pay out more than they bring in, that’s not a sustainable business model.
“Reinsurance is also getting more expensive due to the amount of losses, not just in California, but also in other states” that experience tornadoes, hurricanes and other disasters, Janet Ruiz, communications director with the Insurance Information Institute, told theLloyd’s of London is a big player in the reinsurance industry, as is Swiss Re. These companies make a living by assessing risk and deciding what premiums to charge their customers to cover those risks.
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