'Given this rigged market, is it surprising that insurance companies are looking for the exit doors?'Īll this means the state's human landscape may need to be re-imagined.

A court eventually sided with the company, but the state's policy structure makes it more difficult for insurers to recoup their growing fire-related costs. In 2016, State Farm sought a 6.9-percent rise in rates, but the commissioner ordered a decrease instead. The Golden State finds itself in this mess because of a 1988 initiative 'that gave the insurance commissioner near-dictatorial powers to set and roll back rates,' Steven Greenhut argued in the Orange County Register. And that means homebuyers 'need to be aware that the costs of living in harm's way are going to rise in coming years.' Insurance companies have recently faced about 20 climate-related disasters a year with payouts exceeding $1 billion, and those increased costs are showing up on bills: The average cost of a home insurance policy is now $1,900 a year - but in places like Miami, threatened by coastal flooding, the price tag reaches $5,000 annually. 'Climate risk is driving insurer decisions like never before,' economist Benjamin Keys wrote at The New York Times. (Louisiana and nine other states just sued the federal government to prevent sharp new rate increases in the federal National Flood Insurance program.) That's 'making it more expensive for people to live in their homes' and could result in policymakers choosing to move residents 'out of the most dangerous communities.' How will the climate crisis change home ownership in California and beyond? What are the commentators saying? The New York Times reported that because of climate factors, Florida, Kentucky, Louisiana and other parts of the United States are seeing insurance rates rise quickly in the places it's still available.

State Farm's decision to pull back is an inflection point that 'threatens the broader economic picture of California,' one expert told E&E News.īut it's not just California. 'Insurance companies are struggling to keep up' with the pace of climate-driven disasters, Politico reported, and California's insurance rules have complicated the matter: The state limits how fast rates can increase, making it more difficult for insurers to remain profitable while facing large payouts on a regular basis.

Golden state farm