State Farm Seeks Enormous Rate Increases in California to Prevent Insolvency | KQED

Well, you're going to piss off the policyholders then. State Farm is a mutual insurance company. It's owned by the policyholders. It's essentially a non-profit, since profits go to reduce premiums or pay dividends to the policyholders.

The thing is, the company isn't turning a profit. When what fills the cup doesn't match the hole in the bottom, at some point the cup will be empty. California has mismanaged the wilderness areas and allowed development without concern for potential fire danger. Climate change, high fuel loads after decades of suppressing natural fires, improperly maintained electrical infrastructure, and a lack of "Fire Wise" education are all contributing to huge wildfires and high property loss rates.

If California were to seize every insurance company in the state, they would quickly be in the same predicament - needing to raise premiums to cover the losses.

The only real solution is to reduce the risk. That's why the NFPA came up with local Fire Safe Councils. We educate the homeowners about how to make our homes resistant to wildfire damage. Using grant money, we reduce the fire danger by clearing hazardous undergrowth. We provide resources for homeowners, like chipping programs, matching funds for tree removal, and other assistance in maintaining defensible space. We have successfully lobbied for insurance discounts when homeowners complete risk reduction measures.

California already has a state run home insurance company. They are allowed to charge whatever they need to charge to always offer a plan to any homeowner even in high risk areas. Guess what? It's twice as expensive as State farm.

If I had the option of paying State farm 50% more or paying double to go back to CA fair plan, guess which I'd choose.

Idk. I feel like government is bad a running one company but is good at scaling up.

I’d rather see ca offer a good baseline insurance plan. That or offer fire protection like they do for flood and earthquake.

You are seizing a dead corpes tho

Seems like you conveniently forgot another option here? Seize the fucking company. It belongs to California now.

Assuming the financial report about State Farm's insolvency in California is true, how do you think this will help?

Lets play out your scenario:

1. California state gov seizes State Farm California (they can't seize it in other states).
2. SF is already broke.
3. Current premiums don't cover the cost of near future claims.
4. What little money the current premiums come in goes to pay some claims
5. Employees stop getting paychecks.
6. Lots of homeowner claims go unpaid without more money from somewhere.
7. Employees quit because they aren't getting paychecks without more money from somewhere.

What are you advocating for differently than the scenario above? Where is the needed money going to come from to:

1. keep premiums the same level they are now
2. pay out future claims that exceed the revenue from premiums
3. pay employees to continue to process claims

Where is that money?

Classic Lemmy.

Seems like you conveniently forgot another option here? Seize the fucking company. It belongs to California now.

privatize the gains, socialize the losses! -rich fucks, usually.

Sounds like they paid out for recent claims and don’t want to play anymore.

Is it? I’ve never had a problem with them, but I’ve also never used anyone else.

Like a bad neighbor, State Farm's not there.