Huge losses from national disasters prompt industry to jack up prices and pull back from some markets; ‘worst possible scenario’ for consumers
After Allstate suffered billions of dollars in losses and failed to get the rate increases it wanted, it resorted to the nuclear option.
The insurance giant threatened last fall to stop renewing auto insurance for customers in three states that hadn’t given in to its demands, which would have left those policyholders scrambling for coverage. The states blinked.
In December, New Jersey approved auto rate increases for Allstate averaging 17%, and New York, a 15% hike. Regulators in California are allowing Allstate to boost auto rates by 30%, but still haven’t decided on its request for a 40% increase in home-insurance rates after the insurer refused to write new policies.
For many Americans, getting insurance for both their cars and homes has gone from a routine, generally manageable expense to a do-or-die ordeal that can strain household budgets.
Maybe it’s time for a state to start a nonprofit insurance fund? Insurance companies exist only for profit, which is antithetical to the point of insurance.
Florida, of all states, created this. There are requirements to use it, but for many it is their only real option.
Does it actually cover anything? I haven’t looked into it but my knee-jerk reaction is that it’s very simple and doesn’t cover anything important, especially anything having to do with climate change.
Florida here. They have adequate coverage, but there are caps in some extra options or high-end tell estate. The bigger issue is that all the other instance agencies are pulling out of the state so Citizens (the state insurance) is having to cover more and more to the point that the state is just one direct hurricane hit away from insolvency.
Well some states already have that for example Citizens in FL. Everyone who buys property insurance has to pay into it to cover people who own property in places that nobody in their right mind would insure for wind. Some states only allow work comp through the state or the state competes with private insurers as well. But given the political climate in like half of states I’m not sure how you expect that will really be better. Private insurers are definitely looking for profit but when the state steps in it’s not like rates are going to be dirt cheap, or if they are just just going to be paid by tax increases instead. Home and property insurance is hella expensive in some areas because it costs a lot of money to constantly rebuild people’s buildings and auto insurance is hella expensive because people buy hella expensive cars then drive like fuckin maniacs, and medical costs are outrageous. If they state handles the insurance you’re still gonna have to pay for your insurance and you’re still gonna have to subsidizebstupid people who drive like idiots and whatnot, but you have Ron DeSantis siphoning funds instead of CEO bonuses and golden parachutes.
And the states regulate the hell out of insurance anyway, might as well just provide it at no profit if you’re making all the rules.
You mean like a GovErmnent Insurance COmpany?