How bad have things gotten in California? If you are somehow doing well enough to be able to afford to buy a new home there, you may not be able to get homeowner’s insurance. Or at least not from State Farm. The insurance giant announced yesterday that it will not be offering new homeowner insurance policies in the state, though they will continue to honor existing policies. The company is citing a variety of reasons including “catastrophic events” and skyrocketing construction costs. But I’m confident that we can all read between the lines and figure out that there is more to the story than that.
State Farm is too polite to call things as they are…
Keeping an insurance company profitable relies on the majority of policyholders rarely or never needing to file a claim. Payouts are made to the exceptions to that rule. But bad things happening to people in California is no longer the exception. It’s the rule in many areas. Some of the stores that have closed down have cited their inability to obtain affordable insurance anymore.