Most insurance companies are usually in the red from a revenue standpoint on home/car insurance. Insurance companies make their money on their other offerings. There is numerous reasons they leave states, but it's not from revenue standpoint.
Off-Topic: Southern California Fires
- Thread starter BigJCy
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Sounds like the fires are closing in on the Rose Bowl:
The gall of the this fire! Can't it wait until after sunset?
It's not from a revenue standpoint -- it's from a cost standpoint. Companies are leaving areas where their paid-out claims are the highest and trying to refocus their lines into places where they have lower risk and lower payouts...which, at the end of the day, is still just a profit margin matter. Can't make money if you're writing a bunch of costly policies. Shrink the red policies and go harder into black ones.
It just so happens that a large chunk of those bad policies happen to come from places more prone to severe natural disasters.
I’m about 15 miles away from the Palisades. We are good where we are. Can see and smell the smoke cloud but fortunately that’s all.
Pretty somber day all around LA today.
Pretty somber day all around LA today.
This is where the state insurance commissioners come in. When they cap the allowable premium increases to a point it does not make financial sense for the insurance companies to operate there, they leave.
You can speak to it in terms of cost or in terms of revenue. But it’s all the economics of it one way or the other.
As if there are spare resources just standing around to put out this new fire in the Hollywood Hills. Very dry and low humidity out in southern california right now.
This is absolutely terrifying. Talking to friends there and outlook is very grim. I’d fire jumps any more if the freeways this could quickly get apocalyptic.
I’d be questioning whether I’d get out if I were in any of the suburbs. With how fast these are exploding, you’re not going to have much warning before a situation gets dangerous.
Just saw that LA has gotten 0.03 inches of rain since Oct. 1, nearly 5 inches less than usual. Yikes.
Mass pandemonium south of Hollywood Hills. Palm trees starting to catch on fire. Helicopters circling and throwin the kitchen sink at this thing to stop it.
They have a perimeter around it. Hopefully they can corral it. It is near the famous Hollywood Bowl. Many a concert has occurred there
Flood, tornado/wind, and hail are big ones too. And more frequent and widespread.
Fine, get the rates fixed either way and cut the profits. I don't have any of it so...
For a hurricane or a flood, I get it, because you can predict the super high risk properties. But the equivalent of this situation in California would be telling literally the entire state of Iowa that they can’t have reasonably priced home insurance (and therefore maybe can’t borrow money to buy the home in the State) because Iowa is a high risk tornado zone. These fires aren’t in heavily forested areas, and a good chunk of them are within a few miles of the coast, where you would expect the fire risk to be much lower.
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