[Cyclopath]

State Farm will no longer provide home insurance to new California customers, the company announced on Friday, citing “historic increases in construction costs outpacing inflation, rapidly growing catastrophe exposure, and a challenging reinsurance market.” In other words, it’s getting too expensive to rebuild homes lost to the state’s increasingly destructive wildfires. https://www.curbed.com/2023/05/state-farm-california-insurance-climate-change.html We have a problem with fire. Will this happen here?

[treeswarper]

It has already happened here, but at a smaller scale. There was a front page story some time ago about a house above Wenatchee--a very nice house, that had the fire insurance dropped, and they were having difficulty finding a replacement. Dunno if they ever did find any insurance. Have heard rumors of the same over in the Methow, but can't confirm it, along with rates being jacked up. I'd expect the same around Leavenworth, if it hasn't already started there. It is number one on the Most Likely To Burn town list. Or was.

[jinx'sboy]

[Chief Joseph]

[Pyrites]

The article misses State Farm’s reason for not taking new accounts, and presumably going to non-renewal soon. State Farm in CA has been intending to raise residential rates to reflect wildland fire risks. A lot. So residents complained to CA govt. Not many insurance companies vs lots of rural homeowners. Unfair that my rates are X times what someone that insurance company believes are at only moderate risk from group fires. So govt stopped insurance companies from doing so a couple weeks ago. The effect is that instead of risk spreading, at most basic the general idea of insurance, the insurance system, through the companies, are required to have lower risk policy holders subsidize higher risk policy holders who own homes that are more likely to burn. Insurance rates will not be as different as a rational analysis might arrive at. The reaction by State Farm has bounced all over various media, including internationally. Only on LinkedIn did I see timely discussion of these two connected events as they happened. Fire insurance in the sticks has alway been more expensive than somewhere with hydrants subject to ITM with adequate fire flow connected to a real water system, a staffed engine a couple miles this way, another a couple miles that way, and so on. It’s just that in the current fire regime the insurance companies claim the difference in rates is less than the difference in peril should reflect. Expect more to follow the market leader.

[kiliki]

[altasnob]

This is great news. The US subsidizes rural home ownership over urban home ownership in a variety of ways, home insurance being one of them. The US ranks second in average house size on Earth, and has the most sprawled out, least dense metro areas on Earth. Every year, Americans continue to flock to the wildland urban interface at an alarming rate. If everyone in the world lived the way Americans live it is game over for humanity. Now that insurance companies are starting to refuse to insure homes that sprawl into the wildland urban interface, it will force Americans to move towards the urban core, where they should be living (becuase density is more sustainable than sprawl). I expect the change to be slow as everyone just has to has a home in the woods with a view.

[kiliki]

I wonder what changes we'll see as the Boomers die off or can't live in their rural homes anymore and my (smaller) generation (X) grows older. There are so many retirees in big houses all over rural areas in WA. Are people my age going to want a 5 bedroom house in Kitsap Co or Camano Island or Port Ludlow etc etc? I have noticed a difference between the attitudes my older relatives/in laws have about moving into fire prone areas and I wonder if younger generations will be doing this at the same rate. (I notice that article used numbers from 2010-2020 so it seems like Boomer retirements are likely a big part of that). I have an older relative in CO who plans to move to a rural mountain-y area, because he's always wanted to, and that's that. We on the other hand declined to buy the wonderful cabin on the Methow River we rent regularly because it seems inevitable it will burn or flood, and I don't think my risk averse calculation here is exceptional among my group.