Brushing Away Fire Insurance

First of all, let's deal with the chimera in the room -Global Warming Climate Change had nothing to do with the catastrophic fires in Los Angeles this week.

There has been no appreciable change in SoCal rainfall in the past 175 years. That's a 1st order indicator of climate right there.

Now let's get on to what's scary for those of us living in this deep blue insane asylum this week: homeowner's insurance. Dig this edited snippet from X.

I began practicing law in the 80s. Since then I've litigated insurance related issues all over the country, including my share in California. This  situation is going to hit hard nationally - maybe even internationally.  The ultimate consequences will be staggering.

Insurance companies can't afford the risk of bad governing and poor planning. If government chooses to focus on things like DEI, cultural competency, and LGBTQ hires -  as opposed to maintaining a razor sharp emphasis on things like infrastructure, including reservoir systems, water flow, fully staffed and well trained manpower, fire houses, pumps, etc. (you can't focus on both) - who bears the risk? Everyone, including insurance companies. Insurers can hardly afford the inflated costly rebuild materials in California anyway, but moreso it's the excessive regulations that compound the cost of a rebuild AFTER a loss.  No sane enterprise, insurance related or otherwise, wants to be in a forced marriage with low level incompetent bureaucrats manning the desks of a local municipal codes department.

Working through the maze of regulatory bureaucracies that is California comes at incomprehensible costs to people who simply want to put up a building.

Not only that, California regulations aggressively cap premiums and require approval of all rate hikes and in some situations may be required to participate in pooled payouts for disasters that the government-run home insurance program (FAIR) can’t cover.

So buckle up. This is going to cost you.

Having built and remodeled houses in California, I know he's right about the regulatory hurdles in construction. They were bad for us, but are far worse along the coast where the big dollar damage happened. That's not the part that's scary. 

FAIR is the state-run, as in deep-blue California-run, insurance that became necessary when several large insurers fled the state after the last round of screwups by the progs. FAIR is very expensive and has almost no reserves. $200M is what I recall seeing. The losses from these fires are on the order of a hundred B. 

No problem, right? The state is on the hook for that, right? Wrong.

Any insurance company operating in the state of California is liable for the losses suffered by FAIR. Every insurer operating in CA is manacled to that corpse. They are all going to pay which means we are all going to pay and then ... what?

Well, the sane ones that still operate in the state will leave. There just isn't any money to be made insuring 7+ figure assets in an environment of gasoline and match-flinging meth-heads. Or, to be more accurate, dry kindling, high winds, lazy and incompetent political leaders, tens of thousands of crazed addicts and environmental regulations that prevent the accumulation of water and the removal of fuel.

Where is that going to leave California residents? It's going to leave us at the U-Haul parking lot. Hopefully we can get out before all the insurers do.

Our governor, Gavin Newsom, doing what he does best.