Proposition 103 was passed 1/8/1988! Assume that 36 years ago that CA land and water water management was OK.
State Farm can not be expected to lose 26% during the last 9 nine years in CA. Why should clients in other states support CA property management issues?
Much longer period of mismanagement. See 1962 Documentary (yoo toob, etc.) that describes the 1961 Bel Air wildfire. It details the fire, loss of 484 homes, and the ongoing mismanagement of the peril by the California government. Narrated by the late, great William Conrad. Well worth the 1/2 hour view time.
Title of documentary: Design for Disaster. Search results include some mention of local ‘Los Angelinos’ (their term, not mine) commenting in 1989 of the continued mismanagement.
$5 billion in cumulative underwriting losses. A continued loss trend for 9 years? Why then does State Farm continue to do business in California? If Insurance 101 is too complicated for State Farm leadership, then perhaps a junior high school principles of business course might better explain the meaning of profit and loss to their upper management. Failing that, then perhaps a language class recital of the word ADIOS, might be more understandable.
There are so many layers to why they operate in CA other than simple HO insurance. Most know by now that it’s not the simple HO policy that State Farm makes its business. It’s all of the other lines of business that attach to the single policy that creates their success and something has to be the loss leader. I would imagine that 9 years of pretty poor “leadership” at the commissioner level, amplified by Prop 103, has led to unapproved rate changes and far too low rates for exposure. This would lead to underwriting losses, and it would be foolish to abandon the potential of CA volume if there is some hope of reform with a new commissioner…or it could get worse like it has with the obsession for control by ignorance. What do we get from this? More regulation via added bills to ultimately increase cost to consumers and make it even more difficult for companies to operate in CA, driving down options, and creating even higher costs. So now more companies will exit CA and the echo chambers from above will all blame them for leaving an abusive relationship by exercising their choice to do so.
The commissioner is creating an artificial market shortage by not allowing companies to price their products.
My fear as a State Farm insured is that I will now be unable to find a company other than Cal Fair Plan to cover my house. I’d rather pay State Farm 22% more than the alternatives such as Cal Fair Plan or paying an E&S insurer ten times the amount I pay today.
Some neighbors are concerned about the increase but then I always ask them if they would invest their 401K dollars into Property insurers and the answer is “No”.
Until the leadership accepts the rate increases, the property owners may go without coverage. The rest of the US experiences rate increases, and we have prop coverage.
Let’s hope that California doesn’t turn into Florida where all the major writers have left the state and all that’s left is a hodgepodge of fly by nighters and the majority is written by the State Insurer, Citizens. “I’m for the government and I’m here to help.” lol
Proposition 103 was passed 1/8/1988! Assume that 36 years ago that CA land and water water management was OK.
State Farm can not be expected to lose 26% during the last 9 nine years in CA. Why should clients in other states support CA property management issues?
Much longer period of mismanagement. See 1962 Documentary (yoo toob, etc.) that describes the 1961 Bel Air wildfire. It details the fire, loss of 484 homes, and the ongoing mismanagement of the peril by the California government. Narrated by the late, great William Conrad. Well worth the 1/2 hour view time.
Title of documentary: Design for Disaster. Search results include some mention of local ‘Los Angelinos’ (their term, not mine) commenting in 1989 of the continued mismanagement.
Who could have saw this coming?
seen*
$5 billion in cumulative underwriting losses. A continued loss trend for 9 years? Why then does State Farm continue to do business in California? If Insurance 101 is too complicated for State Farm leadership, then perhaps a junior high school principles of business course might better explain the meaning of profit and loss to their upper management. Failing that, then perhaps a language class recital of the word ADIOS, might be more understandable.
There are so many layers to why they operate in CA other than simple HO insurance. Most know by now that it’s not the simple HO policy that State Farm makes its business. It’s all of the other lines of business that attach to the single policy that creates their success and something has to be the loss leader. I would imagine that 9 years of pretty poor “leadership” at the commissioner level, amplified by Prop 103, has led to unapproved rate changes and far too low rates for exposure. This would lead to underwriting losses, and it would be foolish to abandon the potential of CA volume if there is some hope of reform with a new commissioner…or it could get worse like it has with the obsession for control by ignorance. What do we get from this? More regulation via added bills to ultimately increase cost to consumers and make it even more difficult for companies to operate in CA, driving down options, and creating even higher costs. So now more companies will exit CA and the echo chambers from above will all blame them for leaving an abusive relationship by exercising their choice to do so.
They should turn in their Certificate and then watch the fun.
The commissioner is creating an artificial market shortage by not allowing companies to price their products.
My fear as a State Farm insured is that I will now be unable to find a company other than Cal Fair Plan to cover my house. I’d rather pay State Farm 22% more than the alternatives such as Cal Fair Plan or paying an E&S insurer ten times the amount I pay today.
Some neighbors are concerned about the increase but then I always ask them if they would invest their 401K dollars into Property insurers and the answer is “No”.
Until the leadership accepts the rate increases, the property owners may go without coverage. The rest of the US experiences rate increases, and we have prop coverage.
Let’s hope that California doesn’t turn into Florida where all the major writers have left the state and all that’s left is a hodgepodge of fly by nighters and the majority is written by the State Insurer, Citizens. “I’m for the government and I’m here to help.” lol