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As wildfires ravage Southern California, homeowners in Pacific Palisades find themselves grappling with an unbearable reality: their homes are burning, and their insurance policies—once their safety net—were canceled just months ago by State Farm.
In a move justified by the company as a strategy to avoid “financial failure,” State Farm canceled over 72,000 homeowners’ policies statewide, with Pacific Palisades—a now-charred affluent neighborhood—bearing a significant brunt.
James Woods, a renowned actor and Pacific Palisades resident, summed up the community’s frustration on social media.
“Actually, one of the major insurance companies canceled all the policies in our neighborhood about four months ago,” he wrote. more
Jake will probably turn back into a white guy now.
Sounds like they gave everyone plenty of notice that this was going to happen. Ca also had a fallback insurance plan. Pretty much no reason to have ended up uninsured unless that was your choice. No praise for the horribly corrupt, government-protected cartel that is insurance. Much like in Florida and elsewhere, these companies probably should have been charging way more from the start given the high fire dangers. Possibly some areas should even have been uninsurable. That certainly would have prevented any building. But that would have meant no money for builders or greedy city councils, state governments, etc. And there you see the root of some of the corruption.
After seceral paragraphs I see no mention of how the State of California’s Insurance Commission is to blame for this by not allowing the insurance companies to charge premiums proportional to risk. Similarly, State Farm is the biggest insurer in much of the country, what have the other insurers done? Or is State Farm the last to leave the table and being stuck with the check?
Yeah, insurance is a bit of a slimy business.
Yeah, this in a State if not Federal disaster.
Yeah, this was caused by human arrogance.
If all 1600 homes insured by State Farm in Pacific Palisades burned down, conservatively valued at $5 million each, that would have been an $8 billion hit to State Farm, and bankrupted the company. I’m no apologist for insurance companies, but State Farm could see how mismanagement of California government has resulted in massive wildfires over the years, and finally said “enough”.
BTW, if my home insurance was cancelled, I would find another company and get another policy ASAP and not wait 4 months to see what happens.
It’s the timing that is suspect… like somebody knew something and that something is the fires are deliberate and more are being set.
I read that State Farm asked the California government agency (that regulates their premiums in the state) permission to raise their rates. CA said no, so their only recourse was to cancel their policies where fires were most likely to occur because of mismanagement.
I see no difference in denying coverage for fire in a fire prone area as they do with flood insurance.
And any homeowner that doesn’t seek other insurance to cover their home is a fool. Unless they have been attempting to find insurance, but no one will insure them, but no one is commenting that that is the case.
Still, it is a messed up business. Sounds like blame is widespread.
State Farm Isn’t There
Starting with Mr. Liberty the comments are spot on.
That said I live in IL and most recent premium notice (State Farm) on one of my vehicles arrived to show a DOUBLING if the premium. Well actually four premium notices with all having different numbers and changes to the policy. Almost seems they’d like to lessen their exposure and raise the various deductibles.
Actuaries are working overtime.
Of the quite a few threads on the fires posted on this site, this is the first one to call attention to the dumb-asses that live in this area, an area that gets fires every single year, and how they thought it was a good idea to roll with not having fire insurance for 4 months.
So now, all you folks who do not live in California will share in the financial misery of having to subsidize idiots and the bad decisions they make when Newsom gets federal money to help bail him out.
The folly of building in fire prone areas, flood prone areas (New Orleans, below sea level) and hurricane prone areas, like building a house on an active volcano.
…its like someone wants us to kill insurance CEOs when the problem is actually the Democrats…
It’s crazy how many are rushing to blame State Farm for pulling out. They just saw high risk and didn’t want to stay. Like the stores that are leaving because they get robbed daily. Someone noticed the situation and took advantage. They either wanted to cause chaos or make a statement. I’m betting the latter. There is probably a manifesto out there somewhere. Someone posted an aerial view on X that showed 3 fires starting simultaneously within a few miles of each other. IDK if it’s authentic but would explain it.
Merely…coincidences…..
It’s a real estate scam being worked out through the politicians, insurance companies, and international criminals.
For years I have said that we all wind up paying for this weapons-grade level of waste and incompetence with the Fed throwing our hard-earned tax dollars at this Socialistic State of California!
People in Florida: “Your first time?”
Yeah, the headline sounds pretty bad, but you can actually see that State Farm has a point. The D’s have turned California into an uninsurable hell-hole, and I really can’t blame the insurers for not wanting topay for other peoples failures.
And then FEMA rushes in to offer everyone a buyout.
No money to rebuild, only money to go away.
New 15 min city.
Listen to Adam Carolla’s take on this. Language warning.
https://x.com/EricAbbenante/status/1877207054105886836
One of the points he brought up that I agree with is that people that had homes between the highway and the coast are not going to be allowed to rebuild.
Having lived in Southern California and in a fire risk area, I have a couple of comments on the situation.
First, State Farm is not the only insurance company to have ceased or at least cut back doing business in California. For example, Allstate quit writing new policies over a year ago, although at the time the company was willing to renew existing policies. But there are several other companies that decided to quit the homeowner’s insurance business in California. Keep in mind that California is a state with a large number of customers, so to cease doing business there because of financial considerations is a major decision.
Second, California makes it extremely difficult to build homes. The process can take years, and developers are required to build significant infrastructure, including schools, police and fire substations as well as traffic abatement, as a condition of being allowed to build. Among other things, this has resulted is significant home value appreciation over the years due to supply and demand; my wife and I could not have afforded to purchase our home five to ten years after we did buy it. This means homes that may have been purchased for $250k 30 years ago may be valued at over $1 mm now. Wildfires are non-discriminatory – they generally take out entire neighborhoods and in some cases most of entire towns. This is a huge potential liability for insurers.
Someone commented that the fires may have been set by arsonists. In some cases this is true, but native California vegetation is designed to burn and is therefore very flammable. Just off the top of my head, in Orange County we have had fires started by homeless people building campfires, a 100 acre fire started when a person doing target practice hit a rock which caused a spark which started a fire, a major fire started when a police officer crossed a median and his tail pipe caught the vegetation on fire, and by a controlled burn that got out of control. There is a lot of highly flammable fuel, and with high winds and rugged terrain it is easy for fires to get out of control.
These LA fires may also have other significant impacts that are not known yet. California has anti-deficiency mortgage protection for home buyers, which usually means that a lender can only foreclose on a mortgage and not sue the homeowner for any deficiency between the value of the property and the amount of the mortgage. A homeowner who took out a $500k mortgage on a house that is now worth $2mm can, if the house is destroyed, just walk away and all the bank can do is take the property back. Pacific Palisades is a very desirable area and it is the location that is worth all of the money, so this may induce owners who did lose everything to keep paying on the mortgage, but there is some risk to the banking industry.
Financially, many local SoCal government entities are under water. But arguably, staffing a fire department to a level that it can handle three or four major fires at the same time would be overkill and a waste of resources, so I can’t really blame LA County or LA city for some of these lacks of resources. Where I do blame governments is their lack of action in obvious fire abatement procedures such as clearing out dead underbrush on a regular basis or taking steps to assure an ample supply of water.
As I mentioned, in the 1990s my wife and I purchased a home in a designated fire area – this is not uncommon and much of inland Orange County is in designated fire zones. This was disclosed, the developer had taken fire mitigation steps, and we deemed the risk to be acceptable and were able to get insurance. However, over the years the value of our homes increased dramatically, and if a major fire took out our development, the hit to the insurers could have been in the hundreds of millions of dollars for a relatively small development. We have since moved out of California, but while we lived there we were aware that the chances of our home being burned to the ground was pretty high.
Rageaholic has the BEST take on all this. 100% agree.
https://www.youtube.com/watch?v=DY3sBJbuVus
Florida’s having issues, too.
Thanks, Gyp. Haven’t watched him in a while.
I do understand the comments about building in high risk areas. However, every area in the country has a high risk of something. There are two areas that have no history of earthquakes: Part of Florida and the Houston/Galveston area. Two areas that have a great risk of hurricanes: that same part of Florida and the Houston/Galveston area.
I think we have seen huge increases in home insurance premiums every year for years.
Be it fires or floods or earthquakes or tornados or whatever, there really is no “safe place.”
That being said, corrupt and/or incompetent government certainly exacerbates the situation. May this be the impetus to rid the country of the scourge of DEI.
^^^^
I was with State Farm for 20+ years. Never had a problem with them until I made a claim. They paid the claim and cancelled my policy.
The fires in CA are our Lahaina. Interesting, insurance policies canceled, and right after that homes and businesses burn to the ground. Leadership is complacent and lacking. Maybe this will finally wake up the liberals who continue voting for these idiots.
I have always said that industries beleaguered by the insane policies of California’s Democrats should boycott the state (gas stations, auto dealerships, etc.). I cheer on the insurance companies for picking up and leaving.
By the way, I have used State Farm for 40 years and they have always come through for us fantastically.
So all insurers in CA are required to offer earthquake insurance. It is hugely expensive and has a 10% deductible (10% of the VALUE, not 10% of the damage) and still 20th Century insurance lost $9 billion the morning of the Northridge earthquake. When CA wouldn’t drop the earthquake insurance requirement, the simply left the state. CA government, and ALL GOVERNMENTS for that matter, are the enemy of the people.
https://x.com/i/status/1877179074998587839
Wyatt,
Spot on. I posted earlier that Allstate just raise our homeowners premium from 6K to 10K annually. The rest of the residents on my court were forced to go with the State Insurance and it’s not any cheaper. I’m a little suspicious that this is a new revenue source for the state and their goal is to get everyone in California that owns a home on it. I found the map for the fire zone designations. Our garage is in the high fire zone the rest of the house isn’t. The map was done 10 years ago. Since then they’ve put a subdivision in behind us. It use to be a vacant quarter section with weeds as tall as I am. My thought was have them update the map. Nope, the underwriters strictly go by zip code.
Another thought is if there’s a mortgage on any of these homes the mortgage company will immediately find fire coverage for that home and and pass the cost on to the home owner.
I was born and raised to about the age of 14 before the family relocated. So from approx 1960 to 1969 the only fire I remember as a kid back then was Watts burning due to the riots.
I disagree with the notion that that area is an inherently dangerous place to live. It all comes down to management. Controlled burns, weed and vegetation abatement, and building a shit load of water desalinization plants would go a long way towards solving the problem.
California has not built a new reservoir in over 11 years. Mainly due to the freaking Sierra Club. Northern California does not have the water to support Southern California. My local reservoir is way down right now. That’s not a viable solution and neither is lake Havasu. L.A. has a huge prison population. Get them out there chopping down brush. But the fact of the matter is the morons in charge have done nothing, zip, zero. Except cut the fire fighting budget by 20 mil and give a bunch of fire fighting equipment away for free to the Uke. My two year old Granddaughter would be equally effective in managing that train wreck.
It was just a hand full of fires.
State Insurance… interesting. Never heard of that before. In my opinion Politics/politicians should not be in the insurance business, but if they want to be, maybe they should think about tying it to the real estate taxes.
Pay your taxes, get a basic policy. Then pay extra for more coverage if you want it.
Harry
It’s called the California FAIR plan. There’s not much fair about it.
https://www.insurance.ca.gov/01-consumers/200-wrr/California-FAIR-Plan.cfm
Gavin finally tells the truth,
https://x.com/i/status/1877079822511305124
Harry – like retirement insurance…right? Aka Social Security.
State Farm saw the DEI writing on the wall in California. I don’t blame them. They saw Newsome ignore advice that would have prevented this level of catastrophe. I have to buy flood insurance where I live in addition to normal homeowner’s insurance. Californians should have to purchase fire insurance in addition to regular homeowner’s insurance. What we are seeing is the obvious outcome of the left’s war on America.