Insurance Commissioner Ricardo Lara. (Photo: Kevin Sanders for California Globe)
Largest U.S. Insurance Companies Now Claim ‘Climate Change’ is Behind Ending Coverage
With major insurers blaming something as ambivalent as ‘climate change,’ Democrats are now faced with managing this political disaster
By Katy Grimes, September 5, 2023 7:53 am
Some of the country’s largest insurers have told industry regulators that “extreme weather patterns caused by climate change” is behind the decision to stop writing certain coverages in some regions, as well as excluding protections from various weather events and raise monthly premiums and deductibles.
“In the past three months, 5 insurance companies operating in California have either stopped accepting all new homeowner insurance applications or put severe limits on how many new applications can be accepted in a year,” the Globe reported in August. “State Farm became the first company in May to no longer accept new applications for any kind of insurance other than personal vehicle insurance. In June, Allstate made a similar announcement, saying that they had already not accepting new applications all year. Farmers was the next to announce last month, reducing the overall number of new monthly policies that they would accept.”
Additionally, AmGuard and Falls Lake announced limitations on insurance options for homeowners. This is all on top of several insurance companies, including AIG, leaving the California homeowners insurance market. The Washington Post named Allstate, American Family, Nationwide, Erie Insurance Group and Berkshire Hathaway making the announcement to curtail policies.
“Major insurers say they will cut out damage caused by hurricanes, wind and hail from policies underwriting property along coastlines and in wildfire country, according to a voluntary survey conducted by the National Association of Insurance Commissioners, a group of state officials who regulate rates and policy forms,” the Washington Post reported.
We are witnessing in real time the collision of foolish political policies, and a favored lobbying industry loathe to pay out on policies when disasters strike out of bankruptcy concerns. And in California with an “annual wildfire season,” this is a man-made disaster and very political.
Insurance providers are also more willing to drop existing policies in some locales – foothill and rural communities – as they become more vulnerable to natural disasters. Most home insurance coverages are annual terms, so providers are not bound to them for more than one year, WaPo reports.
WaPo reports the staggering amount of claims just this year:
“U.S. insurers have disbursed $295.8 billion in natural disaster claims over the past three years, according to international risk management firm Aon. That’s a record for a three-year period, according to the American Property Casualty Insurance Association.”
“Natural catastrophes in the first six months of 2023 in the United States caused $40 billion in insured losses, the third costliest first-half on record, Aon found.”
“’There’s no place to hide from these severe natural disasters,’ said David Sampson, president of the American Property Casualty Insurance Association. ‘They’re happening all over the country and so insurers are having to relook at their risk concentration.’”
Californians already felt the pinch with homeowners fire insurance, particularly following the deadly and disastrous 2018 Camp fire in Northern California. Hundreds of thousands of California homeowners in foothill, rural and mountain regions were dropped entirely from insurance policies, or provided exorbitant renewal quotes. The State created the Fair Plan which “provides basic fire insurance coverage for high-risk properties when traditional insurance companies will not -” insurance coverage with very high rates.
Insurance coverage is the amount of risk or liability that is covered for an individual or entity by way of insurance services.
Many in the state worry that additional insurers could pull out later this year and into 2024, potentially leading to a collapse of the home insurance market in the state, leaving many homeowners uninsured or faced with a very limited number of options.
In late August, California State Republican Senators delivered a letter to California Insurance Commissioner Ricardo Lara, urging him to take more direct action in fixing the state’s faltering homeowners insurance market. It’s been crickets since.
“The insurance industry is broken and only you have the power to fix it – and the responsibility,” Senate Republicans said in the letter. “Proposition 103 gave California the unique situation of having an elected Insurance Commissioner responsible for regulating the insurance industry. Our caucus has pushed for legislative fixes for years now – even decades – to try to prevent the homeowners’ insurance market from collapsing. Unfortunately, our efforts fell on deaf ears and major insurers have now left the market, and we fear more will be following suit.”
Now with major insurers blaming something as ambivalent as “climate change,” Democrats are faced with managing this disaster – will they admit that climate change-created disasters is a myth and natural disasters occur naturally, or will they double down on their nonsense? Will Insurance Commissioner Lara pull his head out of the sand and do his job?
Lara, whose entire career has been in politics with no private sector experience, appears like a deer caught in the headlights, and may be wishing his political career didn’t lead him to the Insurance Commissioner’s office. If the state, which is running a huge budget deficit, gets involved even more in the insurance businesses, could the state go bankrupt?
Remember, Lara was in the hot seat in 2019 following massive statewide fires, when he was caught accepting tens of thousands of dollars in political contributions from people with ties to companies he regulates,” California Globe reported. Following “revelations that Lara took oodles of money from the industry prior to making decisions in their favor, Lara was under fire for his secretive speech to a convention of industry executives where he expressed support for revamping consumer protection laws in their favor.” Is it a stretch to hope Lara can effectively address this insurance crisis?
The purpose of homeowners insurance is to provide financial protection against catastrophic loss. With insurance companies announcing they will exclude natural disaster protections because of “climate change,” the insurance becomes worthless or insignificant at best. Will policy holders be faced next with health insurance that excludes the cost of expensive surgeries and cancer treatments, and auto insurance which excludes collision coverage?
I don’t think insurers can blame cancer, surgeries and collisions on climate change – thus the fallacy of this argument.
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August 23, 2019
Hum….if only the state would have taken the appropriate actions to mitigate the impact that these disasters could cause, in particular, implemented basic forestry management principals and not have run the logging industry out of the state which was the primary entity that prevented forests from turning into uncontrollable kindling boxes. Of course, when their own incompetence is exposed, they just turn to blaming the weather. How typical.
When all else fails blame Climate Change. A new business strategy, I presume😒
So arson is now under the umbrella of “Climate Change”?
Interesting how arson is always initially ruled out until it cannot be hidden from the public.
Insurance providers are only taking their orders from BlackRock. BlackRock pulls the strings.
Climate Change ideology is the movement that makes Al Gore and friends a lot of money. Meanwhile, Californians and now Hawaiians are left with destroyed property and unaffordable insurance costs.
What a sham!
Remember private property ownership is the enemy of Marxism.
No doubt these big insurance companies have globalist investment firms like BlackRock, Vanguard, and State Street as major shareholders directing them to push the bogus globalist climate change agenda if they want to continue operating? Meanwhile Ricardo Lara who had ZERO insurance industry experience but was installed as Insurance Commissioner with Democrat voter fraud does nothing as California’s insurance market is imploding. Maybe he’s just doing exactly what his deep-state Democrat masters want?
Oh I am sure his lack of expertise is purposeful. If the California government really wanted a well operated government then those put in place would be well qualified and actually work for the betterment of the residents. Newsom et al. are not good stewards of our tax dollars or natural resources. They have been proven as frauds. It seems the main objective is to break this state so they can implement more government control!.
When will the majority of voters wake up and smell the coffee and vote these frauds out of office? If the majority of those who want true change get out the vote then it makes it harder for the cheat to take place.
We must have the attitude that our vote still matters to make change. The total voter turn out for California was 46.6%. Just imagine getting a 10 to 20 percent increase of the independent/conservative voter to cast a vote for change!
GOP-backed “legislative fixes” would have allowed insurance companies to hike rates arbitrarily, with no transparency, using algorithms that they keep secret. They would have pushed more homeowners into high-risk policies and relieved the companies of their obligation to, well,… *insure* property. We, the homeowners and taxpayers, would be the ones stuck holding the bag when another natural disaster happens. Whether disasters arise through climate change or not is irrelevant to this issue. The number of claims has gone up and companies just don’t like shelling out cash.
Put another way, insurance companies are playing chicken with home insurance policies, and the GOP is first to blink. What’s so great about that?
“Science Facts”, this might come as a shock to you, but California is run by the Democrats. It is not run by the GOP.
“John the Patriot” and also “Belkabeast”: I was quoting the article, “Our caucus has pushed for legislative fixes for years now…” I agree that Democrats have had many failures in managing state resources and effective insurance regulation. My point is that the GOP “fixes” are worse than the problems they think they can fix. But I had to do some research to find out what their proposed fixes were.
I’ve paid way too much for health insurance, too. But the article is about purported GOP “legislative fixes” relating to weather-caused property damage. Their “fixes” are nothing more than proposals to cave into insurance company demands. And yes, the only reason these “fixes” weren’t adopted is because the GOP doesn’t control State government.
Science Facts – you quoted my quote of the Senate Republicans who sent a letter to the Insurance Commissioner urging him to take more direct action in fixing the state’s faltering homeowners insurance market.
“The insurance industry is broken and only you have the power to fix it – and the responsibility,” Senate Republicans said in the letter. “Proposition 103 gave California the unique situation of having an elected Insurance Commissioner responsible for regulating the insurance industry. Our caucus has pushed for legislative fixes for years now – even decades – to try to prevent the homeowners’ insurance market from collapsing. Unfortunately, our efforts fell on deaf ears and major insurers have now left the market, and we fear more will be following suit.”
Read carefully – As you can see, their “legislative fixes” were never passed, and here we are. The Democrats own this disaster, as they are in charge of absolutely every political office in the state, and it is their twisted environmental policies, and neglect of the electricity infrastructure and maintenance, which caused most of the wildfires.
Phony “Science Facts”. The GOP would allow insurance companies to raise rates arbitrarily? Calling BS on that one! People living in California are very aware of insurance companies arbitrarily raising rates if you file a claim. And health insurance rises arbitrarily for no reason at all. And what about all of the utilities fees arbitrarily being increased? All of this under 100% Democrat rule! Don’t blame the GOP for your failure!
Now that is based fact!😀
Dr. Mr. SciFa you may {possibly} know science, but you don’t know insurance. “Arbitrary” and secrete algorithms are prejudicial statements that shows you lack any knowledge of how the insurance industry runs. But since you assert you know it all, I now I have to discount anything else you say.
Rates should be set by the market – that would in the long run make rates less “arbitrary:” If you as a consumer dont like your ‘arbitrary’ rate, go elsewhere. Second, claims history and the actuarial data that have been collected and paid out on over decades by an insurance company are, and should be, proprietary to the insurance companies who develop them; its part of a company’s competitive advantage. Whether a company wants to offer a policy of robust coverage or a stripped down policy, they will need to know their risk level and potential payoff, based on their actuarial data: there is nothing wrong with making a profit. Moreover, if a company is losing $.30 to $.50 for every $1 in revenue (ie $1 in premium collected and paying out $1.30 to$1.50 in claims ) they will not be able to stay in business very long. And that the issue.
So to say “GOP-backed” would “push homeowners into high risk policies…”, Mr. Science, where do you think those customers are currently being forced to go? Answer: the Fair Plan. And for many, that is the only choice they have. So clearly any of you comments are based on a pollical pre-disposition and void of any actual understanding. Please stop spreading misinformation and do us all a favor: stop talking about things you really have no idea about.
Insurance actuaries identify trends that they deem potentially catastrophic to their bottom line.
The state of California has descended into literal chaos beyond the point of no return: This and therefore, indemnification of major assets in an environment devoted of order and stability is extremely risky. The homelessness situation alone that has manifest in every major city in California compounded by the analytics this never abates, instead becomes worse projects only one prudent strategy; retreat.
It’s gotten to the point where the Emperor knows he has no clothes but still continues to ask, “does this make my butt look big?” What a crock, what a sham, and it’s as if we’re lovin’ it…like wrestling with a pig – everyone gets dirty, but the pig LOVES IT. I swear, something cataclysmic has to happen soon; the stupid meter has been pegged to the right for far too long, and it ain’t broke, it’s reading accurately.
A friend of mine used to say, back during the Jerry Brown 2011+ third term re-emergence years, “it’s amazing that California functions at all,” when looking at the huge mess we had even then in the state. Well now California is almost fully non-functional; certainly closer to it than anyone could have ever imagined it would be.
The dog ate my homework? Blobal glorming is the new catch all excuse.
Empty headed “science” people love it.
Expecting politicians to do anything, let alone the right thing, is totally stupid. Besides this is exactly what the climate mafia, communist scum want. To destroy everything and turn everyone into serfs again.