Worsening wildfires are hiking up home insurance rates in California, the biggest market in the U.S. And as climate disasters increase across the country, other states are feeling the pressure too.
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This disaster will hopefully finally reveal what many of us have come to know: A lot of insurance that we buy in this country is nothing more than a money making scam.
This is how America will suddenly “get” the climate emergency. Actuaries have seen this coming for years. As soon as many citizens are refused insurance or know somebody who has, there will be a demand to change.
Insurance corporations are antiquated. Their main purpose is to maximize profits and not be a safety net for homeowners. With the American government becoming more corrupt there’s a little hope for change.
Profit isn't really the problem. "Spread of risk" is the problem. Only those exposed to a catastrophic risk (like wildfire) will pay for the coverage, and that's not enough to run a viable insurance program. The risk has to be spread across a big population, like the state, and it must be mandatory.
Not really. You said "insurance for profit" was the problem. Profit isn't the problem. Focusing on profits of large corporations is a distraction from the real problem. Which is, our society hasn't dealt with the reality of climate change and how it will destroy concepts like private ins.
I hate to defend insurance companies because they can be completely scummy, but most insurance companies operate on a pretty thin margin of between 3% and 8% profit. Most of their income actually comes from investing about 95% of their premiums into the market.
Yes it does, but the point is that if insurance went 100% public your rates wouldn’t “dramatically fall.” Insurance companies pay out or expense 95% of what they take in and it wouldn’t be much different for public insurance. A little less overhead and marketing costs and that’s it. 10% less maybe?
Sure but also the government program will likely pay out much more often and with less hassle and doesn't necessarily have to make a profit. The incentives for better service are all there.
If they pay out more, their expenses are higher. Losses will be absorbed by taxes which you also pay. I’m not totally opposed to public insurance, we have it in some places in Canada, but it’s not a panacea and it doesn’t result in huge savings. Location determines premiums more than anything.
I will try to look that up because I don't believe it. And the profit motive does materially increase their attempts to fuck their customers on claims.
There is an alternative. Although it’s very expensive. It’s called the Calfair plan. All the regular carriers have canceled me due to fire risks. I’m now paying 6 times the amount I use to pay. I’ve never had a claim in over 40 years. $6000 a year and it keeps going up.
Well, it seems that giant insurance company oligarchs believe in climate change and are making business decisions based on it, but the rest of us are supposed to think it's a hoax or not happening at all. 🙄
This is old news not driven by California but began when Congress stopped in the intern flood insurance FY2003 in rebuilding at risk beach houses. However, major insurance companies have bailed on home insurance in Florida, Louisiana, Mississippi
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The insurance companies are.
They are revealing the deep nature of their inhumanity, which also goes by the name of greed.