One of the jobs that sounds absolutely mind-numbingly dull to this writer is that of an actuary. Math was never her strong suit, and actuaries use math, statistics, and economic theory to analyze, assess, and manage risk. Like with insurance.
Insurance is predicated on paying into a system to protect against catastrophic and often unforeseen disasters, and actuaries help calculate the risk of those disasters happening.
Like wildfires.
In California, wildfires have been a problem for a while and it comes down to terrible forestry management and water conservation policies enacted by the Democrat supermajority that's run the state for years. So actuaries look at that risk, realize the money collected by insurance companies is not enough to cover the potential payouts in the event of a massive wildfire, and adjust accordingly.
Last year State Farm Insurance requested the state of California approve significant rate hikes for homeowners, renters, and condos. That approval is still pending, but State Farm could not risk the financial burden and dropped a lot of policies in the state.
Last year, State Farm canceled 1,600 policies in Pacific Palisades because the state would not allow them to raise premiums enough to cover their exposure. The affected homeowners would then likely have to rely on the state-run FAIR Plan, an expensive last-resort insurance… pic.twitter.com/xe9bLPtaN3
— Laura Powell (@LauraPowellEsq) January 9, 2025
The entire post reads:
The affected homeowners would then likely have to rely on the state-run FAIR Plan, an expensive last-resort insurance program. But the FAIR Plan reportedly only had a surplus of $200 million as of April 2024 and was likely to become insolvent if a catastrophic event occurred.
Governor Newsom goes around posturing about politics instead of trying to solve urgent problems. Our state government takes billions of dollars from hard-working Californians and provides barely anything in return. An unconscionable failure.
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And just so we're clear: it's bad when State Farm can't cover its financial obligations (because California law exacerbates the severity of wildfires), but it's no big deal when the state's FAIR Plan can't cover its obligations.
Those screenshots are from an LA Times article from April 2024, but the problem of the FAIR Plan’s insolvency was widely reported. Apparently, state officials addressed the problem by crossing their fingers and hoping that a likely, predictable event would not occur. pic.twitter.com/4uenzbSw3F
— Laura Powell (@LauraPowellEsq) January 9, 2025
This was all predictable. And largely preventable.
They may not be able to stop the fires, but by clearing brush and storing storm water, they could have made containing and extinguishing the fires easier.
What happens when the FAIR Plan becomes insolvent?
— Laura Powell (@LauraPowellEsq) January 9, 2025
The insurers who haven’t already left the state are required to bail the program out. The loss will be passed on as a surcharge to all the homeowners in the state.
Living in California is about to get even more unaffordable. pic.twitter.com/FBJ22nSwtw
So it becomes a vicious circle.
Thanks, Gavin and the Democrats! Bang up job!
Agree there was some bad policy but also angry with the insurance companies. These companies took homeowners payments for DECADES, probably most without claims, and then just dropped them. I almost feel like they should get to recoup something for what they paid in.
— Logos2021 Centrist, XX, Pro-Free Speech (@LogosMMXX) January 9, 2025
That's not how insurance works.
The people are paying, but not getting what they need. Maybe it's time for State Farm to rethink their cancellation policies or the government to step up and find a better solution for these affected homeowners.
— Truthful Voice (@webheraldnet) January 9, 2025
Or maybe the state should enact policies that decrease risk so rates don't have to be so high.
Where has all of California's money gone?
— Kevina Gafa 🇺🇸 (@KevinaFaga) January 9, 2025
Hey, Newsom's new $9 million mansion ain't gonna pay for itself, and flights to Ghana are expensive.
This is what happens when you have political leaders who have no clue how anything in the real world works, and a majority of residents who want to feel good about virtue signalling supporting them. We can only warn you so many times... https://t.co/Ls9z5EELVN pic.twitter.com/E0L5i2Wd3g
— Steve Gordon (@stevemgordon67) January 9, 2025
Maybe LA turning into a pile of ash will help them wake up.
Sad it had to come to this.
Progressives seem to believe that insurance companies are infinite pots of money whose job it is to just cradle everyone in their loving arms and make sure nothing bad ever happens to them, without charging money for that service https://t.co/7PSPG06jst
— Noah Smith 🐇 (@Noahpinion) January 9, 2025
Progressives have no idea how the real world works.
None whatsoever.
Once again, government price-fixing leaves people in a far worse position than had the market just been allowed to work. https://t.co/LgiG6rC5YR
— Bonchie (@bonchieredstate) January 9, 2025
Friendly reminder that Kamala Harris wanted to do this, on a national level, for food.
This is terrible for the homeowners and yet another example of how the popular understanding of insurance has shifted from a shared risk pool to some kind of layway program. https://t.co/s7GdbQWdGR
— 1982VintageNut (@1982VintageNut) January 9, 2025
And that understanding shift was by design.
Perhaps, just maybe, you should stop voting for the people who keep screwing you over. https://t.co/EkUIpnlPWh
— Chesty (@ChestyPullerGst) January 9, 2025
This is solid advice.
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