Did you hear that State Farm Insurance made national headlines last week when it announced it would stop selling new home insurance policies in California. State Farm is California’s largest single provider of bundle home insurance policies — the company had 20% of the market in 2021.
After the disastrous fires of 2017 and 2018, the number of Californians who were told by their insurer that their policy wouldn’t be renewed jumped up by 42%. The two severe wildfire years wiped out decades of industry profits. HOT FLASH: Insurance companies are in business to make money……
Life on a high wire without a net? Home prices are soaring and high priced homes in exclusive areas need special insurance. AIG & Chubb are cancelling policies too.
Last year, American International Group notified thousands of customers that their home insurance policies would not be renewed. Chubb, a high-end insurer, said it would continue to non-renew some of its customers. Why? Reinsurance premiums have spiked. Reinsurance is what insurance companies do to minimize the risk of getting hit with millions of dollars of costs all at once. Did you know that California law prohibits insurers from passing along the cost of reinsurance to customers? So it is like being on a high wire without a net…Insurance companies are all about calculated risks. They want assurances about their insurance….