Irene and 22 others
kiwifarms.net
- Joined
- Mar 27, 2023
Blame the state legislature for that not the insurance companies. They passed a law requiring insurance companies provide coverage in these uninsurable areas in order to do business anywhere else in the state. So they left.
That's only a part of the stupidity. The main problem is that the law put price caps into place preventing the companies from charging fees commensurate with the risk. Even if they hadn't pulled out of the state, the underlying reality would not be changed and this fire would have made them insolvent and require a tax payer bailout for them to be able to cover all of the claims.
Trying to have more equitable costs (which is particularly funny because it makes poorer people pay higher premiums to cover expensive homes they don't live in) causes perverse incentives. What stops someone from building a mansion in a high risk area or taking any measures to make it safer from fire if their costs aren't disproportionately higher to cover the value of the home and risk of destruction? Insurance premiums proportionate to the risk and cost are what will make home owners make better decisions about where to build and how to otherwise mitigate their risk.
Yet the socialists that run California have no understanding of economics and labor under the delusion that reality will bend itself to their idiotic policies. Eventually reality rears its ugly head and the socialists sit befuddled wondering how this could have ever happened before shrugging it off and doubling down on their idiocy. Nature can't select against them fast enough.