It's the first time in the states history they approved an emergency rate increase, that tells you A LOT about the financial state of companies in CA. I've said it over and over on these threads, CA's Fire rates have been "artificially" low for 20+ years held down by the Ins Commissioner. We are #3 in the nation on total CAT losses sustained but only #24 on collected premium (this is industry wide). Pile on COVID inflation, bad cycles in the market and on going "fire seasons" making CA a ticking time bomb. CA DOI doesn't allow companies to use future modeling to build reserves for major events like we saw in January into current rate. Think time value of money, small 5-7% increases 20 yrs ago would have put all majors companies in a positive position to handle major CAT losses. Decades of bad legislation and "Profit Control" brought us to a breaking point in 2023, Ins companies started going BK and leaving the state, most just stopped writing new business. That's only the story on the retail side, about 8-9 years ago reinsurance companies started tripling their premiums or leaving CA altogether leaving major insurance companies with a HUGE expense (talking 100's of Millions annually) and once again the DOI told ins companies those premiums couldn't be factored into rates for the consumer. All this on top of utility companies only paying (or insured for) a small % (<10%) of the fires they've started, making ins companies eat the losses. The sad part is even with these huge rate increases coming down the line, it may still be "too little, too late"....Hold onto your hat, you ain't seen nuthin yet...!
California approves emergency rate hike of up to 38% for State Farm
It's not easy being Ricardo Lara – an insurance industry under pressure, and consumers wanting cover at below market dateswww.insurancebusinessmag.com
After having 8 vehicles broken into over a 1.5 year period (we have a fleet of 20), we were just eating the costs anyway & not reporting because we would pay more in the long run by claiming. Hell, we quit calling the cops because that's just time we were paying for the employees to deal with something the cops won't do anything about anyway (not dogging them, it is what it is).
My home in simi valley, no fire risk, no claims went from $2400 to $2850
