More bad news for California
State Farm, California's largest insurance provider, announced it would not renew insurance policies for approximately 72,000 homes and apartments in the state beginning this summer.
In March, State Farm stated that it would discontinue coverage for around 30,000 homes and 42,000 apartments, citing surging costs, increasing risks of disasters such as wildfires, and outdated insurance rules as reasons for terminating the policies, per the Associated Press.
Link:
Click for the article!
33 Replies
V
Vippie1
2y
what the premiums of State Farm or Allstate(or any other major insurance companies) would be if they didnt advertise. The marketing has got to be a higher proportion of expenses then most any other comparable type industry. Flo and the Gecko are probably the 2 most famous people in America. Although I personally like Caveman more.
** Edited by Vippie1 at 5/5/2024, 12:21:42 PM
(In response to this post by EDGEMAN)
2y
Looks like they had $46B in revenue from premiums, $43B in payouts for claims, $5B in claims expenses, and there is a $10B line for "Service and Administrative." But their annual report is really abridged without a lot of granualarity.
The normal line on an income statement is "Sales, General, and Administrative," which is basically the cost of sales/marketing, overhead, and indirect costs. I would assume "Service and Administrative" is the same thing as SG&A, so their advertising budget is a portion of that $10B.
In 2022, they reported an $8.7B loss. Maybe if they did zero advertising, they would have turned a small profit. But I think most anyone would agree that zero advertising is not a good business model, especially in a hyper-competitive industry like insurance.
(In response to this post by Vippie1)
2y
our Insurance agency for over 30 years.
(In response to this post by Tafkam Hokie)
2y
(In response to this post by Vippie1)
2y
(In response to this post by Vippie1)
2y
The house has been with USAA since 1987 and has never had any claim paid out. Had to get rid of flood insurance and the juice was not worth the squeeze. Wind and hail is pricey and not sure what the next bill will show
(In response to this post by EDGEMAN)
yeah i am one of them
i have another year of coverage…might have to go to state coverage
(In response to this post by EDGEMAN)
2y
(In response to this post by EDGEMAN)
We should make them go bankrupt so they can’t pay out a dime!
Lots of ignorance in this thread.
(In response to this post by ColoVT82)
M
MikeVT85
2y
(In response to this post by EDGEMAN)
2y
like disasters. Go Figure.
(In response to this post by EDGEMAN)
2y
access to big data.
For centuries, the point of insurance was to bring in as many people under one umbrella to spread out the risk. If one person has a claim it's OK since you have 99 that didn't.
But now, insurance companies have enough data with enough granularity, they can calculate the risk for each individual person or property. Now, they don't really care how many people they insure or how spread out the risk is...if you are deemed too risky, they don't want you.
(In response to this post by UTPr0sim)
2y
California was news to me, but I'm not surprised. They want to limit their coverage in areas that have a lot of damage due to catastrophic events. With the way insurance rates have skyrocketed, I'm surprised the companies haven't all shuttered their doors.
(In response to this post by UTPr0sim)
2y
want to pay anything, they just want to collect premiums. The way it works most don't get the benefit of their premiums. You would think its like taxes....
(In response to this post by PhotoHokieNC)
2y
About 7 years ago we had a hail storm damage our roof and vehicles. No issues with the adjusters, roofers, or the body shop. The insurance company didn’t baulk at the repairs. What they did do was jack up our insurance rates by over 200% when it was time to renew (auto and home were bundled). We had been with them (Progressive) for well over 10 years at that point so I told them so nicely to eff off and went with Farm Bureau.
** Edited by GSOHokie01 at 5/5/2024, 9:59:10 AM
(In response to this post by UTPr0sim)
2y
My extended family (father's cousin) ran one US syndicate for Lloyd's (they hated him BTW). He insured the Trade Center towers. When they fell he had to fight like hell to try to get money out of Swiss Re (Reinsurance is essentially insurance for insurers....) He had a rather heated battle in court in London where he was praised for his testimony & things were looking great to finally get their money out of Swiss Re, but he was later found back at his apartment dead of unknown causes. The Swiss are even harder than the rest in paying out.....
(In response to this post by UTPr0sim)
2y
(In response to this post by EDGEMAN)
2y
the most difficult to deal with for insurers. Causing as much discomfort as the weather there.
And most have elected officials/commissioners which adds to the politicizing of insurability.
(In response to this post by EDGEMAN)
H
HOKIERIT
2y
week. He said Markel DOES still insure residential properties in those states. There are a couple of important BUTS....First, residential property is only a tiny percentage of their total national book of business, limiting the magnitude of their exposure. Secondly, and most importantly, they only insure them "off-line". I think that is his term (an insurance man will know the correct term). Something about not having to run through the state insurance commission, so they can EXCLUDE certain occurrences (ex. hurricanes in Florida, wildfire, floods, and earthquakes in California).
He admitted that is a HUGE exception in those states, but the only way they could even afford to do business there , despite that being such a tiny small percentage of their business. I can only imagine if that was your main business.
I understand he has a corporate / industry axe to grind, but he said the only way the insurance industry will get fixed is STARTING with tort reform to limit liability on any of a number of fronts. Otherwise, he says this is just the tip of the iceberg!
Interesting man. Interesting talk..scary as hell!
(In response to this post by Stork)
I’ve sued Markel related insurers a number of times……
I agree with him on tort reform but insurers generally have a major problem with claim handling.
(In response to this post by HOKIERIT)
H
HOKIERIT
2y
battling GEICO now on a claim. I ran over a piece of rebar (we think) that fell off of a work truck in front of me. It popped my run flat AND poked 2 holes the diameter of a golf club shaft in my wheel. Being an AMG, large wheels, and the run flat. By the time I was said and done, it was $3400 (included the other side tire and alignment).
They insist on taking pictures a certain way and won't accept pictures already taken. I am sure this is true for body damage, but this isn't THAT. I got the Mercedes dealer to take pictures of the tire and wheel for me. Now GEICO wants me to take it into a body shop. There was no body damage, no crash, and I got the tire/wheel replaced the same day. They are now looking for a reason NOT to pay me for the one tire, the wheel and the alignment...
Believe me, I am NO fan of insurance companies!
(In response to this post by CrystalCoveHokie)
If the old tire and wheel are still available give them access to them
(In response to this post by HOKIERIT)
H
HOKIERIT
2y
(In response to this post by CrystalCoveHokie)
2y
basically all of their neighbors lost their house to the flames...but the cousin's house survived since
she was further away from the wooded areas that burnt. She had been contemplating downsizing but
once the fire happened her home became almost unsellable since no buyers wanted to move into a
charred moon-scape. She said she would have been much better off if the house had also burned and
she collected insurance.
(In response to this post by EDGEMAN)