Yep. The cost for our master policy jumped 4x in 2018. This was right after PG&E burned huge chunks of California (including entire cities) to the ground. That's not a bureaucracy issue that's an "oh shit everything's a lot more likely to burn down than we realized" issue.
The forests are supposed to burn. They burnt for centuries before 1900.
The reaction when houses burn should be "should have built using fireproof materials" or "that happens when you live in a forest" not "here's billions of dollars from more-responsible people".
By fueling 'climate change' anxieties the California supermajority and the monopoly power company PG&E mask their deadly incompetence with massive media spends, stoking fear and with the inevitable result of insurance being withdrawn and businesses leaving the state.
It's a shame there's no credible political opposition in the state, the infrastructure is crumbling, street dwelling drug tourist visitors are out of control, we are not on top of water storage during the heavy rain cycle years that occur every 5-7 years.
And knowing that the insurance companies still priced coverage significantly lower before they saw that PG&E was willing and able to start burning things on their own. California's approach to forest management didn't change dramatically between say 2016 and 2019 but the cost for homeowner's insurance sure did.
Insurance is socialization of risk. It's much more cost efficient to socialize costs for infrequent bad events than it is to require anyone who might suffer said event to make themselves immune to it. The cost for making fireproof all homes that may burn is astronomical, as would be ensuring all homes could survive flood, tornado, hurricane, etc etc.
The adjustment in cost is simply facing the reality that more homes are burning nowadays. They pay for your flood insurance as much as you pay for their fire insurance, and their premiums are moving up faster than yours..
It's not that expensive, reinforced concrete with brick facade and metal roof is fireproof. I happen to know ICF costs 5-10% more than stick-built, so that's about the premium you should expect. But why would people bother when we have to bail them out?
Your analogy is sound but your conclusion is not. There are many home owners that live by the shore that can’t purchase flood insurance from any provider. Similarly with life insurance, if I die engaging in certain risky behavior, it voids my insurance policy.
The purpose of insurance is to socialize losses. But if a few participants in the insurance pool engage in outsized risky behavior, that’s not fair to the rest of the pool that chose significantly less risky decisions.
The conclusion holds since there are a great many homes in CA alone that cannot be insured against fire. They were built before that was an option, or were otherwise grandfathered in after fire codes were established. Same with floods and other threats
These 3 little pig arguments fall a bit flat to me.
You may have not seen what a forest fire, like those NorCal gets, does to a house. The insurance companies will have to pay just as much to replace a yard with some scorched brick in it where a family of four used to live, with their cars, possessions, appliances, etc. The house is ruined whether the walls survived the 1000 degree heat or not, because everything in and around it is lost.
Now there's certainly a class of old wooden houses on grasslands that are vulnerable to becoming infernos from stray sparks.
Assuming they weren't always that vulnerable (and that's what we're talking about here: new risk), I'm just not clear who would pay for it to be torn down and rebuild with (magical?) bricks. Did the homeowners have to do periodic risk assessments and decide when to do this? Who would pay for it? What's their motivation? They have insurance after all. They'll just rebuild.
If the insurance companies were caught off guard by this, how is a home owner to know and preemptively rebuild?
