California has not allowed insurance companies to price individual units, but by zip code. If someone builds in a high risk area, they are effectively subsidized by surrounding low risk houses. Increased rates have also historically been limited by the state.
California also has a highly regulated insurance market that insurance companies…
California has not allowed insurance companies to price individual units, but by zip code. If someone builds in a high risk area, they are effectively subsidized by surrounding low risk houses. Increased rates have also historically been limited by the state.
California also has a highly regulated insurance market that insurance companies have never liked, and many feel insurance companies withholding coverage is partly to try to get rid of regulations they don't like.
It's not just high fire risk people getting dropped, but people living in very urban areas.
Where I lived in CA as a kid, a few rich people fought tooth-and-nail to be permitted to build on the flood plane of the local river. And then, after the inevitable flood damaged their house, they tried to sue local authorities for giving them the permit and failing to protect them!
I don't consider it redlining. California is dealing with the same problem most other states are. We've allowed for relatively unregulated construction in areas where people shouldn't build. Climate change is quickly showing the problem with that. Building a log cabin in a quickly drying forest isn't a good idea.
But, isn't your point that one of the reasons rates are so high for low risk homes is that California forces insurance companies to set rates by zip codes?
California has not allowed insurance companies to price individual units, but by zip code. If someone builds in a high risk area, they are effectively subsidized by surrounding low risk houses. Increased rates have also historically been limited by the state.
California also has a highly regulated insurance market that insurance companies have never liked, and many feel insurance companies withholding coverage is partly to try to get rid of regulations they don't like.
It's not just high fire risk people getting dropped, but people living in very urban areas.
Interesting and thank you for clarifying.
Where I lived in CA as a kid, a few rich people fought tooth-and-nail to be permitted to build on the flood plane of the local river. And then, after the inevitable flood damaged their house, they tried to sue local authorities for giving them the permit and failing to protect them!
Peak CA moment right there
That sounds like California is imposing redlining. Maybe I haven't had enough coffee.
I don't consider it redlining. California is dealing with the same problem most other states are. We've allowed for relatively unregulated construction in areas where people shouldn't build. Climate change is quickly showing the problem with that. Building a log cabin in a quickly drying forest isn't a good idea.
But, isn't your point that one of the reasons rates are so high for low risk homes is that California forces insurance companies to set rates by zip codes?
Yeah but that’s not redlining.