Is it really bad luck if a house in a known fire zone burns down? I would characterize that as probable.

As for FEMA, I’d prefer the government didn’t get involved in helping people rebuild in known disaster zones. Just as I don’t want to subsidize the building of homes below sea level in New Orleans, I also don’t want to subsidize the building of tinderbox houses every four years in fire-prone areas.

Is it really bad luck if a house in a known fire zone burns down? I would characterize that as probable.

As for FEMA, I’d prefer the government didn’t get involved in helping people rebuild in known disaster zones. Just as I don’t want to subsidize the building of homes below sea level in New Orleans, I also don’t want to subsidize the building of tinderbox houses every four years in fire-prone areas.

This article is pretty optimistic. It looks like most people won’t have a problem getting or maintaining insurance:

http://origin.mercurynews.com/news/ci_7275544

Lookoutbelow..,

Let’s put this in perspective; Insurance carriers cannot simply raise rates without first going through a lengthy rate increase filing with the CA Dept. of Insurance that is scrutinized at many levels. Even a 50% increase would be unlikely. 300% .. no way. The broker you mention is prepping you for your next renewal when he’ll be screwing you.

The reason why so many of the cedar victims saw rate increases was most likely not due to a rate increase. It was likey because they became properly insured after the fire. Their underinsurance was due to improper disclosure, improper review or an incompetent agent or all of the above.

Calif is still a great risk for insurers and they are not going anywhere, at least not because of a 1 billion dollar event. That is chump change compared to a good Hurricane or Earthquake. Remember, earthquake is not covered under the homeowners policy and can only be purchased through a state sponsored program with huge deductibles. I believe the southeast U.S. still has much higher claim frequency rates, though the severity may be a little less for your average hurricane event. Hurricanes result in a higher number of claims, but the average payout is less (think a lot of new roofs vs. a completely destroyed house) We had a little over 1K homes destroyed and the remainder of the claims were minor to moderate damage only or hotel expense claims for evacuation. The latter two are low dollars claims compared to the total loss ones.

Overall, when you spread the claims across all the carriers doing business in Calif., I’m sure even the largest (State Farm, Farmers, Allstate) are getting no more than 200 total loss claims and the numbers go down from there with the smallest carriers getting maybe 5-10.

Also, keep in mind the reinsurance most of these carriers carry themselves. They will recover a portion of their loss dollars depending on their reinsurance coverage. Major players like General Re (Gen Re) and other international companies will be sharing some of this pain.

– CMB

Lookoutbelow..,

Let’s put this in perspective; Insurance carriers cannot simply raise rates without first going through a lengthy rate increase filing with the CA Dept. of Insurance that is scrutinized at many levels. Even a 50% increase would be unlikely. 300% .. no way. The broker you mention is prepping you for your next renewal when he’ll be screwing you.

The reason why so many of the cedar victims saw rate increases was most likely not due to a rate increase. It was likey because they became properly insured after the fire. Their underinsurance was due to improper disclosure, improper review or an incompetent agent or all of the above.

Calif is still a great risk for insurers and they are not going anywhere, at least not because of a 1 billion dollar event. That is chump change compared to a good Hurricane or Earthquake. Remember, earthquake is not covered under the homeowners policy and can only be purchased through a state sponsored program with huge deductibles. I believe the southeast U.S. still has much higher claim frequency rates, though the severity may be a little less for your average hurricane event. Hurricanes result in a higher number of claims, but the average payout is less (think a lot of new roofs vs. a completely destroyed house) We had a little over 1K homes destroyed and the remainder of the claims were minor to moderate damage only or hotel expense claims for evacuation. The latter two are low dollars claims compared to the total loss ones.

Overall, when you spread the claims across all the carriers doing business in Calif., I’m sure even the largest (State Farm, Farmers, Allstate) are getting no more than 200 total loss claims and the numbers go down from there with the smallest carriers getting maybe 5-10.

Also, keep in mind the reinsurance most of these carriers carry themselves. They will recover a portion of their loss dollars depending on their reinsurance coverage. Major players like General Re (Gen Re) and other international companies will be sharing some of this pain.

– CMB

CarlsbadMtnBiker

Spot on. Any broker tell you that they are expecting increases of 300% is setting you up. This way when they place business witha differnt carrier that PAYS THEM a higher commiosn you don’t feel so bad and are happy for all the hard work he did.

Insurance is heavily regulated. There is a ton of public information out there. Please do not buy into the hype. It is fairly sickening to hear people make these claims about increases and they have no clue what they are talking about.

Let me present an insurance broker at work. 2 Homeowners policies with equivalent coverage. One Policy is 1700 a year but pays him 17% of the premium. The other policy is 1200 a year but only pays 7%. He will either not tell you about the 1200$ policy or will sell you the 1200 policy but charge you a 500$ broker fee.

Other brokers just try to volume out as many policies as they can and will simply sell the 1200 policy all day. Anytime he see the name of a comapny that he know he has a better price than he is going to solicit your business and ask if your interest in reviewing your policy to se if he can save you money. He already know going in that he is going to cost less.