The real reason is in the article: Proposition 103 is a price control on the cost of home insurance. The law requires California government approval for increases beyond a certain percentage. And the California government is putting up a lot of red tape to prevent those approvals.
So now you get Brandon's inflation for everything including cost to rebuild and reinsurance, wildfires which I'm pretty sure is just poor forest management and antifa arsonists, and the other assortment of natural disasters all combined.
If you're an insurer, California looks pretty risky. The only way to mitigate that risk is to raise the premiums. But you can't do that because of Prop 103 and the California beaurocracy. So your choice is to take a big risk on losses, or pull out.
Surprise Pikachu face when insurers pull out, and now there are fewer choices for insurance. Maybe no choices in the near future.
The free market solution to this problem is to let insurers pick whatever price they want. Competition among insurers will keep prices in check, just like competition for any other good or service keeps prices in check. (NOTE: Competition can't protect against Brandon and the crooks at the Federal reserve.)
What they will do in California is create State homeowner's insurance. They will provide the only insurance option in the State. It is simply more communism and control. They will provide the high quality service that governments are known for and embezzle and steal all the money from the slush fund of premiums. Simply business as usual.
You're exactly right, and the article alludes to that as well with their FAIR program.
Insurers pulling out is part of the plan. Once there's not enough, the state can swoop in and save the day. I'm sure it will be great... at first, but then it will be terrible and worse than it was with the private insurers.
Centralized Planning Failure
The real reason is in the article: Proposition 103 is a price control on the cost of home insurance. The law requires California government approval for increases beyond a certain percentage. And the California government is putting up a lot of red tape to prevent those approvals.
So now you get Brandon's inflation for everything including cost to rebuild and reinsurance, wildfires which I'm pretty sure is just poor forest management and antifa arsonists, and the other assortment of natural disasters all combined.
If you're an insurer, California looks pretty risky. The only way to mitigate that risk is to raise the premiums. But you can't do that because of Prop 103 and the California beaurocracy. So your choice is to take a big risk on losses, or pull out.
Surprise Pikachu face when insurers pull out, and now there are fewer choices for insurance. Maybe no choices in the near future.
The free market solution to this problem is to let insurers pick whatever price they want. Competition among insurers will keep prices in check, just like competition for any other good or service keeps prices in check. (NOTE: Competition can't protect against Brandon and the crooks at the Federal reserve.)
What they will do in California is create State homeowner's insurance. They will provide the only insurance option in the State. It is simply more communism and control. They will provide the high quality service that governments are known for and embezzle and steal all the money from the slush fund of premiums. Simply business as usual.
Yup...I think you really nailed it there, fren.
Hegelian dialectic - aka Problem, Reaction, Solution.
u/#correct
You're exactly right, and the article alludes to that as well with their FAIR program.
Insurers pulling out is part of the plan. Once there's not enough, the state can swoop in and save the day. I'm sure it will be great... at first, but then it will be terrible and worse than it was with the private insurers.
Control of every thing is the goal. Once they have control, then comes the tyranny.