New legislation in Sacramento encourages urban and suburban housing while discouraging exurban sprawl that paves over wilderness and invites fires and floods.įor decades, California’s coastal and urban areas have made it hard to build enough housing for the state’s population, so developers and residents have flocked to cheaper land near and in the foothills, forests and grasslands that are prone to burn. Opinion Opinion: California housing and the environment are often at odds. The company said it had to curtail new policies in order to “improve the company’s financial strength.” In a statement, State Farm said its decision was influenced by the increased construction costs of rebuilding in California, the growing risk of catastrophes such as wildfires and, as a result, the rising cost of reinsurance (essentially insurance for insurance companies). It’s another sign that climate change is driving up the already high cost of living in California and lawmakers need to be far more aggressive in building safer communities. The company’s decision is worrisome because it shows the continued instability in the market for homeowners insurance, which is essential for people to get a mortgage and to protect their assets. While there are still more than 100 insurers writing new policies for property owners in the state, State Farm makes up 21% of the market. It’s even worse news that State Farm simply publicized what other insurance companies have been doing quietly for several years by refusing to renew policies and pulling out of communities at risk for wildfires. It’s bad news that California’s largest home insurance provider, State Farm, decided it’s too risky and expensive to sell new policies in the state.
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