America's coastal cities are a hidden time bomb

[tooqk4u22]

This isn't new...
Design for Disaster, 1961


"This 1962 documentary film produced by the Los Angeles Fire Department, describes the historic Bel Air / Brentwood wildfire that started on November 5, 1961 in the Bel Air community of Los Angeles. Over the course of three days, the wind-driven fire destroyed 484 homes, damaged 190 others, and burned over 16,000 acres. Amazingly, there was no loss of life attributable to the blaze.

The then $30 million disaster led to new laws in the City of Los Angeles to eliminate wood shingle roofs, and to clear dry brush away from homes. The film is narrated by actor William Conrad."

[NorCal]

One of the major takeaways I had after the Marshall fire is the importance of getting rid of wood fences. Fences are the easiest path for fire to spread house-to-house within a neighborhood.

[GilesMM]

...
I've read that home insurance companies started pulling out of insuring Palisades only a few months ago: that should have been a warning to the inhabitants of the level of risk they were under, but non-one seems to have seen it that way, or done anything about it.

I suppose they might insure rebuilding against fire until the brush regrows and becomes dangerous again, and perhaps require concrete walls and roofs rather than timber frames and shingles?  But I can't imagine any insurance company in the area will want to insure against the inevitable mudslides next time it rains heavily.

The Pallisades mudslides have already started, even ahead of the rains.  I guess the water from the firefighting is to blame...


https://www.nbclosangeles.com/news/california-wildfires/pacific-palisades-house-wildfire-landslide/3606713/

[franklin4]

...
I've read that home insurance companies started pulling out of insuring Palisades only a few months ago: that should have been a warning to the inhabitants of the level of risk they were under, but non-one seems to have seen it that way, or done anything about it.

I suppose they might insure rebuilding against fire until the brush regrows and becomes dangerous again, and perhaps require concrete walls and roofs rather than timber frames and shingles?  But I can't imagine any insurance company in the area will want to insure against the inevitable mudslides next time it rains heavily.

The Pallisades mudslides have already started, even ahead of the rains.  I guess the water from the firefighting is to blame...

https://www.nbclosangeles.com/news/california-wildfires/pacific-palisades-house-wildfire-landslide/3606713/

The bummer is that insurance usually doesn't cover landslides but of course would have paid out if the house had burned. So will the owners sue the fire dept for causing the landslide?

[GilesMM]

...
I've read that home insurance companies started pulling out of insuring Palisades only a few months ago: that should have been a warning to the inhabitants of the level of risk they were under, but non-one seems to have seen it that way, or done anything about it.

I suppose they might insure rebuilding against fire until the brush regrows and becomes dangerous again, and perhaps require concrete walls and roofs rather than timber frames and shingles?  But I can't imagine any insurance company in the area will want to insure against the inevitable mudslides next time it rains heavily.

The Pallisades mudslides have already started, even ahead of the rains.  I guess the water from the firefighting is to blame...

https://www.nbclosangeles.com/news/california-wildfires/pacific-palisades-house-wildfire-landslide/3606713/

The bummer is that insurance usually doesn't cover landslides but of course would have paid out if the house had burned. So will the owners sue the fire dept for causing the landslide?

Quite often insurance will cover a claim related to a covered risk. So if a fire, which is covered, was the reason for the water which caused the landslide, it could be covered. Depends on the policy.  Otherwise, I'm sure some slick LA lawyer would argue too much water was used and caused the mudslide. 

[NorCal]

It looks like Colorado is setting up an insurer of last resort like other states.

Unlike CA and FL, they at least seem to be thinking about insurance in the right way.  They want to be sure premiums reflect risk, and those mitigating risks receive credit for it.  We'll see how much of this makes it into actual policy though. 

https://coloradosun.com/2025/01/20/fire-mitigation-homeowners-insurance-premiums/

[LD_TAndK]

Interesting blog post analyzing different factors to try and explain why homeowner's insurance is rising

https://www.construction-physics.com/p/why-is-homeowners-insurance-getting

Interestingly a major factor is an increase in water damage (accidental discharge, freezing pipes, sprinkler failures, NOT floods). Maybe we're running more plumbing through our houses for more bathrooms? Maybe our plumbing practices have become sloppier leading to more failures? (speculation mine)

The second major factor the author identifies is an increase in wind and hail damage.

[sonofsven]

Interesting blog post analyzing different factors to try and explain why homeowner's insurance is rising

https://www.construction-physics.com/p/why-is-homeowners-insurance-getting

Interestingly a major factor is an increase in water damage (accidental discharge, freezing pipes, sprinkler failures, NOT floods). Maybe we're running more plumbing through our houses for more bathrooms? Maybe our plumbing practices have become sloppier leading to more failures? (speculation mine)

The second major factor the author identifies is an increase in wind and hail damage.

You're correct on both of your plumbing observations. Flexible piping (aka Pex) is much easier to install and is better performing in cold weather and less likely to rupture in a freeze. But plumbers install piping in ways that would not have been done "in the old days".
It's always been risky to  run piping in an exterior north facing wall unless it (the piping) was well insulated, but now I see it done all the time, because the Pex performs better and so people believe it won't break (and it *probably* won't).
The hail thing is also scam related. There are unscrupulous roofing companies that will *inspect* your roof post hail storm and declare it a total loss and bill the insurance company for a complete replacement. Nice work if you can get it, I  guess.

[NorCal]

Interesting blog post analyzing different factors to try and explain why homeowner's insurance is rising

https://www.construction-physics.com/p/why-is-homeowners-insurance-getting

Interestingly a major factor is an increase in water damage (accidental discharge, freezing pipes, sprinkler failures, NOT floods). Maybe we're running more plumbing through our houses for more bathrooms? Maybe our plumbing practices have become sloppier leading to more failures? (speculation mine)

The second major factor the author identifies is an increase in wind and hail damage.

You're correct on both of your plumbing observations. Flexible piping (aka Pex) is much easier to install and is better performing in cold weather and less likely to rupture in a freeze. But plumbers install piping in ways that would not have been done "in the old days".
It's always been risky to  run piping in an exterior north facing wall unless it (the piping) was well insulated, but now I see it done all the time, because the Pex performs better and so people believe it won't break (and it *probably* won't).
The hail thing is also scam related. There are unscrupulous roofing companies that will *inspect* your roof post hail storm and declare it a total loss and bill the insurance company for a complete replacement. Nice work if you can get it, I  guess.

Hail is a legit thing. We had at least one, (if not multiple) hail storms that caused over a billion in damage last year. They didn’t get heavily reported on.  Roughly half the roofs in my neighborhood had to be replaced from hail damage last year. Many cars got hit as well. This was golf-ball sized hail.

Many insurance companies in CO are now simply no longer covering hail, or putting massive deductibles on it.

There are changes that should be made to reduce the need for claims.  That doesn’t mean it should be dismissed as a scam. Insurance adjusters have very specific thresholds for what they consider a covered roof claim.

[sonofsven]

Interesting blog post analyzing different factors to try and explain why homeowner's insurance is rising

https://www.construction-physics.com/p/why-is-homeowners-insurance-getting

Interestingly a major factor is an increase in water damage (accidental discharge, freezing pipes, sprinkler failures, NOT floods). Maybe we're running more plumbing through our houses for more bathrooms? Maybe our plumbing practices have become sloppier leading to more failures? (speculation mine)

The second major factor the author identifies is an increase in wind and hail damage.

You're correct on both of your plumbing observations. Flexible piping (aka Pex) is much easier to install and is better performing in cold weather and less likely to rupture in a freeze. But plumbers install piping in ways that would not have been done "in the old days".
It's always been risky to  run piping in an exterior north facing wall unless it (the piping) was well insulated, but now I see it done all the time, because the Pex performs better and so people believe it won't break (and it *probably* won't).
The hail thing is also scam related. There are unscrupulous roofing companies that will *inspect* your roof post hail storm and declare it a total loss and bill the insurance company for a complete replacement. Nice work if you can get it, I  guess.

Hail is a legit thing. We had at least one, (if not multiple) hail storms that caused over a billion in damage last year. They didn’t get heavily reported on.  Roughly half the roofs in my neighborhood had to be replaced from hail damage last year. Many cars got hit as well. This was golf-ball sized hail.

Many insurance companies in CO are now simply no longer covering hail, or putting massive deductibles on it.

There are changes that should be made to reduce the need for claims.  That doesn’t mean it should be dismissed as a scam. Insurance adjusters have very specific thresholds for what they consider a covered roof claim.

Sure, there's definitely legit damage claims, but there are also *other* claims that are less so; hence the term scam.

[NorCal]

Interesting blog post analyzing different factors to try and explain why homeowner's insurance is rising

https://www.construction-physics.com/p/why-is-homeowners-insurance-getting

Interestingly a major factor is an increase in water damage (accidental discharge, freezing pipes, sprinkler failures, NOT floods). Maybe we're running more plumbing through our houses for more bathrooms? Maybe our plumbing practices have become sloppier leading to more failures? (speculation mine)

The second major factor the author identifies is an increase in wind and hail damage.

You're correct on both of your plumbing observations. Flexible piping (aka Pex) is much easier to install and is better performing in cold weather and less likely to rupture in a freeze. But plumbers install piping in ways that would not have been done "in the old days".
It's always been risky to  run piping in an exterior north facing wall unless it (the piping) was well insulated, but now I see it done all the time, because the Pex performs better and so people believe it won't break (and it *probably* won't).
The hail thing is also scam related. There are unscrupulous roofing companies that will *inspect* your roof post hail storm and declare it a total loss and bill the insurance company for a complete replacement. Nice work if you can get it, I  guess.

Hail is a legit thing. We had at least one, (if not multiple) hail storms that caused over a billion in damage last year. They didn’t get heavily reported on.  Roughly half the roofs in my neighborhood had to be replaced from hail damage last year. Many cars got hit as well. This was golf-ball sized hail.

Many insurance companies in CO are now simply no longer covering hail, or putting massive deductibles on it.

There are changes that should be made to reduce the need for claims.  That doesn’t mean it should be dismissed as a scam. Insurance adjusters have very specific thresholds for what they consider a covered roof claim.

Sure, there's definitely legit damage claims, but there are also *other* claims that are less so; hence the term scam.

I’m not saying scam claims don’t happen, but what in your mind separates a scam claim from a legit one?

Insurance adjusters don’t seem to be inclined to approve nonsense in my limited experience with the process.

[farmecologist]

Interesting blog post analyzing different factors to try and explain why homeowner's insurance is rising

https://www.construction-physics.com/p/why-is-homeowners-insurance-getting

Interestingly a major factor is an increase in water damage (accidental discharge, freezing pipes, sprinkler failures, NOT floods). Maybe we're running more plumbing through our houses for more bathrooms? Maybe our plumbing practices have become sloppier leading to more failures? (speculation mine)

The second major factor the author identifies is an increase in wind and hail damage.

You're correct on both of your plumbing observations. Flexible piping (aka Pex) is much easier to install and is better performing in cold weather and less likely to rupture in a freeze. But plumbers install piping in ways that would not have been done "in the old days".
It's always been risky to  run piping in an exterior north facing wall unless it (the piping) was well insulated, but now I see it done all the time, because the Pex performs better and so people believe it won't break (and it *probably* won't).
The hail thing is also scam related. There are unscrupulous roofing companies that will *inspect* your roof post hail storm and declare it a total loss and bill the insurance company for a complete replacement. Nice work if you can get it, I  guess.

We have PEX and love it.  Uninterrupted runs from each faucet to the distribution manifold in the utility room ( in other words, no plumbing joints at all ).

And it seems to be holding up well.  We have been in our home since 1999 and absolutely no plumbing issues ( and we are in the frozen northern midwest ).



 

[ChpBstrd]

Interesting blog post analyzing different factors to try and explain why homeowner's insurance is rising

https://www.construction-physics.com/p/why-is-homeowners-insurance-getting

Interestingly a major factor is an increase in water damage (accidental discharge, freezing pipes, sprinkler failures, NOT floods). Maybe we're running more plumbing through our houses for more bathrooms? Maybe our plumbing practices have become sloppier leading to more failures? (speculation mine)

The second major factor the author identifies is an increase in wind and hail damage.

You're correct on both of your plumbing observations. Flexible piping (aka Pex) is much easier to install and is better performing in cold weather and less likely to rupture in a freeze. But plumbers install piping in ways that would not have been done "in the old days".
It's always been risky to  run piping in an exterior north facing wall unless it (the piping) was well insulated, but now I see it done all the time, because the Pex performs better and so people believe it won't break (and it *probably* won't).
The hail thing is also scam related. There are unscrupulous roofing companies that will *inspect* your roof post hail storm and declare it a total loss and bill the insurance company for a complete replacement. Nice work if you can get it, I  guess.

We have PEX and love it.  Uninterrupted runs from each faucet to the distribution manifold in the utility room ( in other words, no plumbing joints at all ).

And it seems to be holding up well.  We have been in our home since 1999 and absolutely no plumbing issues ( and we are in the frozen northern midwest ).

On the other hand, the emerging research about microplastics and what they do to human bodies could make PEX and our plastic food containers the asbestos/lead paint of the future. As recently as a couple of decades ago it was rare to put our clorinated, flourinated, mineral-containing drinking water in plastic, so we absolutely don't know the effects yet.

Also, while it's easy to find 50-80 year old copper and cast iron pipes that are still in service, it seems rarer to find plastic objects that are even 30 years old that haven't become brittle or started to crumble. The product may be convenient, freeze resistant, and inexpensive today, but we'll have to see if it lasts more than 2 generations.

IDK if these concerns would justify spending more on a new house's plumbing, but it's certainly no slam dunk decision. Plastic could be the hidden time bomb everywhere if for example microplastics are proven to be endocrine disruptors or carcinogens in the next 15 years.

[farmecologist]

Interesting blog post analyzing different factors to try and explain why homeowner's insurance is rising

https://www.construction-physics.com/p/why-is-homeowners-insurance-getting

Interestingly a major factor is an increase in water damage (accidental discharge, freezing pipes, sprinkler failures, NOT floods). Maybe we're running more plumbing through our houses for more bathrooms? Maybe our plumbing practices have become sloppier leading to more failures? (speculation mine)

The second major factor the author identifies is an increase in wind and hail damage.

You're correct on both of your plumbing observations. Flexible piping (aka Pex) is much easier to install and is better performing in cold weather and less likely to rupture in a freeze. But plumbers install piping in ways that would not have been done "in the old days".
It's always been risky to  run piping in an exterior north facing wall unless it (the piping) was well insulated, but now I see it done all the time, because the Pex performs better and so people believe it won't break (and it *probably* won't).
The hail thing is also scam related. There are unscrupulous roofing companies that will *inspect* your roof post hail storm and declare it a total loss and bill the insurance company for a complete replacement. Nice work if you can get it, I  guess.

We have PEX and love it.  Uninterrupted runs from each faucet to the distribution manifold in the utility room ( in other words, no plumbing joints at all ).

And it seems to be holding up well.  We have been in our home since 1999 and absolutely no plumbing issues ( and we are in the frozen northern midwest ).

On the other hand, the emerging research about microplastics and what they do to human bodies could make PEX and our plastic food containers the asbestos/lead paint of the future. As recently as a couple of decades ago it was rare to put our clorinated, flourinated, mineral-containing drinking water in plastic, so we absolutely don't know the effects yet.

Also, while it's easy to find 50-80 year old copper and cast iron pipes that are still in service, it seems rarer to find plastic objects that are even 30 years old that haven't become brittle or started to crumble. The product may be convenient, freeze resistant, and inexpensive today, but we'll have to see if it lasts more than 2 generations.

IDK if these concerns would justify spending more on a new house's plumbing, but it's certainly no slam dunk decision. Plastic could be the hidden time bomb everywhere if for example microplastics are proven to be endocrine disruptors or carcinogens in the next 15 years.

Fair point.  However, I'd be more worried about what is in the city water supply, plastic bottled water, etc...

Because of this, we do run our drinking water through a reverse osmosis system.  Works great!

[GuitarStv]

Interesting blog post analyzing different factors to try and explain why homeowner's insurance is rising

https://www.construction-physics.com/p/why-is-homeowners-insurance-getting

Interestingly a major factor is an increase in water damage (accidental discharge, freezing pipes, sprinkler failures, NOT floods). Maybe we're running more plumbing through our houses for more bathrooms? Maybe our plumbing practices have become sloppier leading to more failures? (speculation mine)

The second major factor the author identifies is an increase in wind and hail damage.

You're correct on both of your plumbing observations. Flexible piping (aka Pex) is much easier to install and is better performing in cold weather and less likely to rupture in a freeze. But plumbers install piping in ways that would not have been done "in the old days".
It's always been risky to  run piping in an exterior north facing wall unless it (the piping) was well insulated, but now I see it done all the time, because the Pex performs better and so people believe it won't break (and it *probably* won't).
The hail thing is also scam related. There are unscrupulous roofing companies that will *inspect* your roof post hail storm and declare it a total loss and bill the insurance company for a complete replacement. Nice work if you can get it, I  guess.

We have PEX and love it.  Uninterrupted runs from each faucet to the distribution manifold in the utility room ( in other words, no plumbing joints at all ).

And it seems to be holding up well.  We have been in our home since 1999 and absolutely no plumbing issues ( and we are in the frozen northern midwest ).

On the other hand, the emerging research about microplastics and what they do to human bodies could make PEX and our plastic food containers the asbestos/lead paint of the future. As recently as a couple of decades ago it was rare to put our clorinated, flourinated, mineral-containing drinking water in plastic, so we absolutely don't know the effects yet.

Also, while it's easy to find 50-80 year old copper and cast iron pipes that are still in service, it seems rarer to find plastic objects that are even 30 years old that haven't become brittle or started to crumble. The product may be convenient, freeze resistant, and inexpensive today, but we'll have to see if it lasts more than 2 generations.

IDK if these concerns would justify spending more on a new house's plumbing, but it's certainly no slam dunk decision. Plastic could be the hidden time bomb everywhere if for example microplastics are proven to be endocrine disruptors or carcinogens in the next 15 years.

Fair point.  However, I'd be more worried about what is in the city water supply, plastic bottled water, etc...

Because of this, we do run our drinking water through a reverse osmosis system.  Works great!

Yeah, I know it's being sold as safe but given the number of things we've been discovering about chemical leaching over the past twenty years, I am uneasy about running all my drinking water through additional plastic before I take a swig of it.

Stuff like this:
https://www.sciencedirect.com/science/article/abs/pii/S0043135414006289
https://pmc.ncbi.nlm.nih.gov/articles/PMC7915131/
makes me leery.

Not that I can do anything about the city choosing to use plastic piping.

[farmecologist]

Interesting blog post analyzing different factors to try and explain why homeowner's insurance is rising

https://www.construction-physics.com/p/why-is-homeowners-insurance-getting

Interestingly a major factor is an increase in water damage (accidental discharge, freezing pipes, sprinkler failures, NOT floods). Maybe we're running more plumbing through our houses for more bathrooms? Maybe our plumbing practices have become sloppier leading to more failures? (speculation mine)

The second major factor the author identifies is an increase in wind and hail damage.

You're correct on both of your plumbing observations. Flexible piping (aka Pex) is much easier to install and is better performing in cold weather and less likely to rupture in a freeze. But plumbers install piping in ways that would not have been done "in the old days".
It's always been risky to  run piping in an exterior north facing wall unless it (the piping) was well insulated, but now I see it done all the time, because the Pex performs better and so people believe it won't break (and it *probably* won't).
The hail thing is also scam related. There are unscrupulous roofing companies that will *inspect* your roof post hail storm and declare it a total loss and bill the insurance company for a complete replacement. Nice work if you can get it, I  guess.

We have PEX and love it.  Uninterrupted runs from each faucet to the distribution manifold in the utility room ( in other words, no plumbing joints at all ).

And it seems to be holding up well.  We have been in our home since 1999 and absolutely no plumbing issues ( and we are in the frozen northern midwest ).

On the other hand, the emerging research about microplastics and what they do to human bodies could make PEX and our plastic food containers the asbestos/lead paint of the future. As recently as a couple of decades ago it was rare to put our clorinated, flourinated, mineral-containing drinking water in plastic, so we absolutely don't know the effects yet.

Also, while it's easy to find 50-80 year old copper and cast iron pipes that are still in service, it seems rarer to find plastic objects that are even 30 years old that haven't become brittle or started to crumble. The product may be convenient, freeze resistant, and inexpensive today, but we'll have to see if it lasts more than 2 generations.

IDK if these concerns would justify spending more on a new house's plumbing, but it's certainly no slam dunk decision. Plastic could be the hidden time bomb everywhere if for example microplastics are proven to be endocrine disruptors or carcinogens in the next 15 years.

Fair point.  However, I'd be more worried about what is in the city water supply, plastic bottled water, etc...

Because of this, we do run our drinking water through a reverse osmosis system.  Works great!

Yeah, I know it's being sold as safe but given the number of things we've been discovering about chemical leaching over the past twenty years, I am uneasy about running all my drinking water through additional plastic before I take a swig of it.

Stuff like this:
https://www.sciencedirect.com/science/article/abs/pii/S0043135414006289
https://pmc.ncbi.nlm.nih.gov/articles/PMC7915131/
makes me leery.

Not that I can do anything about the city choosing to use plastic piping.

Yeah I know. 

The "best" solution would likely be a distillation unit with a stainless steel tank.  Those are quite expensive though and I doubt the average consumer would ever go for that. 

For now, we are going with reverse osmosis..and have been for quite a while. Not a perfect solution...but good enough for us.

[ChpBstrd]

Interesting blog post analyzing different factors to try and explain why homeowner's insurance is rising

https://www.construction-physics.com/p/why-is-homeowners-insurance-getting

Interestingly a major factor is an increase in water damage (accidental discharge, freezing pipes, sprinkler failures, NOT floods). Maybe we're running more plumbing through our houses for more bathrooms? Maybe our plumbing practices have become sloppier leading to more failures? (speculation mine)

The second major factor the author identifies is an increase in wind and hail damage.

You're correct on both of your plumbing observations. Flexible piping (aka Pex) is much easier to install and is better performing in cold weather and less likely to rupture in a freeze. But plumbers install piping in ways that would not have been done "in the old days".
It's always been risky to  run piping in an exterior north facing wall unless it (the piping) was well insulated, but now I see it done all the time, because the Pex performs better and so people believe it won't break (and it *probably* won't).
The hail thing is also scam related. There are unscrupulous roofing companies that will *inspect* your roof post hail storm and declare it a total loss and bill the insurance company for a complete replacement. Nice work if you can get it, I  guess.

We have PEX and love it.  Uninterrupted runs from each faucet to the distribution manifold in the utility room ( in other words, no plumbing joints at all ).

And it seems to be holding up well.  We have been in our home since 1999 and absolutely no plumbing issues ( and we are in the frozen northern midwest ).

On the other hand, the emerging research about microplastics and what they do to human bodies could make PEX and our plastic food containers the asbestos/lead paint of the future. As recently as a couple of decades ago it was rare to put our clorinated, flourinated, mineral-containing drinking water in plastic, so we absolutely don't know the effects yet.

Also, while it's easy to find 50-80 year old copper and cast iron pipes that are still in service, it seems rarer to find plastic objects that are even 30 years old that haven't become brittle or started to crumble. The product may be convenient, freeze resistant, and inexpensive today, but we'll have to see if it lasts more than 2 generations.

IDK if these concerns would justify spending more on a new house's plumbing, but it's certainly no slam dunk decision. Plastic could be the hidden time bomb everywhere if for example microplastics are proven to be endocrine disruptors or carcinogens in the next 15 years.

Fair point.  However, I'd be more worried about what is in the city water supply, plastic bottled water, etc...

Because of this, we do run our drinking water through a reverse osmosis system.  Works great!

Yeah, I know it's being sold as safe but given the number of things we've been discovering about chemical leaching over the past twenty years, I am uneasy about running all my drinking water through additional plastic before I take a swig of it.

Stuff like this:
https://www.sciencedirect.com/science/article/abs/pii/S0043135414006289
https://pmc.ncbi.nlm.nih.gov/articles/PMC7915131/
makes me leery.

Not that I can do anything about the city choosing to use plastic piping.

Yeah I know. 

The "best" solution would likely be a distillation unit with a stainless steel tank.  Those are quite expensive though and I doubt the average consumer would ever go for that. 

For now, we are going with reverse osmosis..and have been for quite a while. Not a perfect solution...but good enough for us.

Copper plumbing is arguably the best or least controversial solution, IMO. The problem is it costs so much.

[Glenstache]

Honestly, for that vast majority of things, a whole house carbon filter under your sink is cost effective, easy and will sorb the vast majority of organic contaminants. If you have elevated metals or other inorganic constituents, then RO can be useful. The downside of RO is that it wastes a lot of water, is more expensive, and leaves you with water with water with no dissolved minerals. Distillation is energy intensive, complicated and also leaves you with water with no mineral content. Super pure water is not that great to drink because it can throw off your mineral balance when drunk in sufficient quantity.

[sonofsven]

Interesting blog post analyzing different factors to try and explain why homeowner's insurance is rising

https://www.construction-physics.com/p/why-is-homeowners-insurance-getting

Interestingly a major factor is an increase in water damage (accidental discharge, freezing pipes, sprinkler failures, NOT floods). Maybe we're running more plumbing through our houses for more bathrooms? Maybe our plumbing practices have become sloppier leading to more failures? (speculation mine)

The second major factor the author identifies is an increase in wind and hail damage.

You're correct on both of your plumbing observations. Flexible piping (aka Pex) is much easier to install and is better performing in cold weather and less likely to rupture in a freeze. But plumbers install piping in ways that would not have been done "in the old days".
It's always been risky to  run piping in an exterior north facing wall unless it (the piping) was well insulated, but now I see it done all the time, because the Pex performs better and so people believe it won't break (and it *probably* won't).
The hail thing is also scam related. There are unscrupulous roofing companies that will *inspect* your roof post hail storm and declare it a total loss and bill the insurance company for a complete replacement. Nice work if you can get it, I  guess.

Hail is a legit thing. We had at least one, (if not multiple) hail storms that caused over a billion in damage last year. They didn’t get heavily reported on.  Roughly half the roofs in my neighborhood had to be replaced from hail damage last year. Many cars got hit as well. This was golf-ball sized hail.

Many insurance companies in CO are now simply no longer covering hail, or putting massive deductibles on it.

There are changes that should be made to reduce the need for claims.  That doesn’t mean it should be dismissed as a scam. Insurance adjusters have very specific thresholds for what they consider a covered roof claim.

Sure, there's definitely legit damage claims, but there are also *other* claims that are less so; hence the term scam.

I’m not saying scam claims don’t happen, but what in your mind separates a scam claim from a legit one?

Insurance adjusters don’t seem to be inclined to approve nonsense in my limited experience with the process.

Sorry, I don't have links for you, but you can probably find them if you want.
The  basics are that unethical roofing contractors will "inspect" roofs after hail storms and find (or even cause) enough damage to convince the homeowners to file a claim for the roof replacement.
The contractors take over at this point. They sue the insurer if they don't cover the claim, and the insurers often end up settling, because it's cheaper than a court fight.
I imagine the homeowner is pleased because they got a whole new roof (Insurance is supposed to "make you whole"), but it has to drive up rates for everyone else if done in bulk.

[ROF Expat]

Interesting blog post analyzing different factors to try and explain why homeowner's insurance is rising

https://www.construction-physics.com/p/why-is-homeowners-insurance-getting

Interestingly a major factor is an increase in water damage (accidental discharge, freezing pipes, sprinkler failures, NOT floods). Maybe we're running more plumbing through our houses for more bathrooms? Maybe our plumbing practices have become sloppier leading to more failures? (speculation mine)

The second major factor the author identifies is an increase in wind and hail damage.

You're correct on both of your plumbing observations. Flexible piping (aka Pex) is much easier to install and is better performing in cold weather and less likely to rupture in a freeze. But plumbers install piping in ways that would not have been done "in the old days".
It's always been risky to  run piping in an exterior north facing wall unless it (the piping) was well insulated, but now I see it done all the time, because the Pex performs better and so people believe it won't break (and it *probably* won't).
The hail thing is also scam related. There are unscrupulous roofing companies that will *inspect* your roof post hail storm and declare it a total loss and bill the insurance company for a complete replacement. Nice work if you can get it, I  guess.

Hail is a legit thing. We had at least one, (if not multiple) hail storms that caused over a billion in damage last year. They didn’t get heavily reported on.  Roughly half the roofs in my neighborhood had to be replaced from hail damage last year. Many cars got hit as well. This was golf-ball sized hail.

Many insurance companies in CO are now simply no longer covering hail, or putting massive deductibles on it.

There are changes that should be made to reduce the need for claims.  That doesn’t mean it should be dismissed as a scam. Insurance adjusters have very specific thresholds for what they consider a covered roof claim.

Sure, there's definitely legit damage claims, but there are also *other* claims that are less so; hence the term scam.

I’m not saying scam claims don’t happen, but what in your mind separates a scam claim from a legit one?

Insurance adjusters don’t seem to be inclined to approve nonsense in my limited experience with the process.

Sorry, I don't have links for you, but you can probably find them if you want.
The  basics are that unethical roofing contractors will "inspect" roofs after hail storms and find (or even cause) enough damage to convince the homeowners to file a claim for the roof replacement.
The contractors take over at this point. They sue the insurer if they don't cover the claim, and the insurers often end up settling, because it's cheaper than a court fight.
I imagine the homeowner is pleased because they got a whole new roof (Insurance is supposed to "make you whole"), but it has to drive up rates for everyone else if done in bulk.

I agree 100% with @sonofsven on fraud being common.  My sister in Florida tells me that after every hurricane contractors come to every house with even minor roof damage and basically promise the homeowner a whole new roof.   The contractor gets a big job as opposed to a small one and the homeowner gets a whole new roof as opposed to just a repaired old roof.  The only immediate loser is the insurance company, but in the long term, everyone pays inflated rates.  Apparently, plenty of people are happy to play along with the contractor. 

[GilesMM]

Florida insurance was collapsing due to roofing fraud, even before the hurricanes. No surprise.


https://www.nbcnews.com/news/us-news/roofing-scams-florida-property-insurance-hurricane-rcna29649

[NorCal]

Interesting blog post analyzing different factors to try and explain why homeowner's insurance is rising

https://www.construction-physics.com/p/why-is-homeowners-insurance-getting

Interestingly a major factor is an increase in water damage (accidental discharge, freezing pipes, sprinkler failures, NOT floods). Maybe we're running more plumbing through our houses for more bathrooms? Maybe our plumbing practices have become sloppier leading to more failures? (speculation mine)

The second major factor the author identifies is an increase in wind and hail damage.

You're correct on both of your plumbing observations. Flexible piping (aka Pex) is much easier to install and is better performing in cold weather and less likely to rupture in a freeze. But plumbers install piping in ways that would not have been done "in the old days".
It's always been risky to  run piping in an exterior north facing wall unless it (the piping) was well insulated, but now I see it done all the time, because the Pex performs better and so people believe it won't break (and it *probably* won't).
The hail thing is also scam related. There are unscrupulous roofing companies that will *inspect* your roof post hail storm and declare it a total loss and bill the insurance company for a complete replacement. Nice work if you can get it, I  guess.

Hail is a legit thing. We had at least one, (if not multiple) hail storms that caused over a billion in damage last year. They didn’t get heavily reported on.  Roughly half the roofs in my neighborhood had to be replaced from hail damage last year. Many cars got hit as well. This was golf-ball sized hail.

Many insurance companies in CO are now simply no longer covering hail, or putting massive deductibles on it.

There are changes that should be made to reduce the need for claims.  That doesn’t mean it should be dismissed as a scam. Insurance adjusters have very specific thresholds for what they consider a covered roof claim.

Sure, there's definitely legit damage claims, but there are also *other* claims that are less so; hence the term scam.

I’m not saying scam claims don’t happen, but what in your mind separates a scam claim from a legit one?

Insurance adjusters don’t seem to be inclined to approve nonsense in my limited experience with the process.

Sorry, I don't have links for you, but you can probably find them if you want.
The  basics are that unethical roofing contractors will "inspect" roofs after hail storms and find (or even cause) enough damage to convince the homeowners to file a claim for the roof replacement.
The contractors take over at this point. They sue the insurer if they don't cover the claim, and the insurers often end up settling, because it's cheaper than a court fight.
I imagine the homeowner is pleased because they got a whole new roof (Insurance is supposed to "make you whole"), but it has to drive up rates for everyone else if done in bulk.

I agree 100% with @sonofsven on fraud being common.  My sister in Florida tells me that after every hurricane contractors come to every house with even minor roof damage and basically promise the homeowner a whole new roof.   The contractor gets a big job as opposed to a small one and the homeowner gets a whole new roof as opposed to just a repaired old roof.  The only immediate loser is the insurance company, but in the long term, everyone pays inflated rates.  Apparently, plenty of people are happy to play along with the contractor.

I have heard of this, but don't live anywhere near Florida.

Isn't this related to flaws in insurance law specifically related to Florida and not something that impacts all states? 

My prior comments were specifically talking about hail claims, and my context is claims in Colorado.  I've never heard of these types of lawsuits in Colorado. 

[ROF Expat]

Interesting blog post analyzing different factors to try and explain why homeowner's insurance is rising

https://www.construction-physics.com/p/why-is-homeowners-insurance-getting

Interestingly a major factor is an increase in water damage (accidental discharge, freezing pipes, sprinkler failures, NOT floods). Maybe we're running more plumbing through our houses for more bathrooms? Maybe our plumbing practices have become sloppier leading to more failures? (speculation mine)

The second major factor the author identifies is an increase in wind and hail damage.

You're correct on both of your plumbing observations. Flexible piping (aka Pex) is much easier to install and is better performing in cold weather and less likely to rupture in a freeze. But plumbers install piping in ways that would not have been done "in the old days".
It's always been risky to  run piping in an exterior north facing wall unless it (the piping) was well insulated, but now I see it done all the time, because the Pex performs better and so people believe it won't break (and it *probably* won't).
The hail thing is also scam related. There are unscrupulous roofing companies that will *inspect* your roof post hail storm and declare it a total loss and bill the insurance company for a complete replacement. Nice work if you can get it, I  guess.

Hail is a legit thing. We had at least one, (if not multiple) hail storms that caused over a billion in damage last year. They didn’t get heavily reported on.  Roughly half the roofs in my neighborhood had to be replaced from hail damage last year. Many cars got hit as well. This was golf-ball sized hail.

Many insurance companies in CO are now simply no longer covering hail, or putting massive deductibles on it.

There are changes that should be made to reduce the need for claims.  That doesn’t mean it should be dismissed as a scam. Insurance adjusters have very specific thresholds for what they consider a covered roof claim.

Sure, there's definitely legit damage claims, but there are also *other* claims that are less so; hence the term scam.

I’m not saying scam claims don’t happen, but what in your mind separates a scam claim from a legit one?

Insurance adjusters don’t seem to be inclined to approve nonsense in my limited experience with the process.

Sorry, I don't have links for you, but you can probably find them if you want.
The  basics are that unethical roofing contractors will "inspect" roofs after hail storms and find (or even cause) enough damage to convince the homeowners to file a claim for the roof replacement.
The contractors take over at this point. They sue the insurer if they don't cover the claim, and the insurers often end up settling, because it's cheaper than a court fight.
I imagine the homeowner is pleased because they got a whole new roof (Insurance is supposed to "make you whole"), but it has to drive up rates for everyone else if done in bulk.

I agree 100% with @sonofsven on fraud being common.  My sister in Florida tells me that after every hurricane contractors come to every house with even minor roof damage and basically promise the homeowner a whole new roof.   The contractor gets a big job as opposed to a small one and the homeowner gets a whole new roof as opposed to just a repaired old roof.  The only immediate loser is the insurance company, but in the long term, everyone pays inflated rates.  Apparently, plenty of people are happy to play along with the contractor.

I have heard of this, but don't live anywhere near Florida.

Isn't this related to flaws in insurance law specifically related to Florida and not something that impacts all states? 

My prior comments were specifically talking about hail claims, and my context is claims in Colorado.  I've never heard of these types of lawsuits in Colorado.

I don't live in Colorado, and I think you are right that the insurance situation isn't perfectly analogous to Florida, but a simple google search turns up a lot of articles about roofing scams.  A lot of cases seem to scam the homeowner, but there's discussion of ripping off insurance companies by causing intentional damage or working in collusion with insurance agents for referrals.  My guess is that homeowners insurance is like car and medical insurance, where some people are happy to make inflated claims for their own benefit.  Insurance companies are happy to let other  customers pay for the cost of this abuse, at least up to a point.   

[bacchi]

Another study, another warning about increasing insurance premiums. This one is specific enough to list cities that are in danger of abandonment.



The study itself is at https://assets.riskfactor.com/media/The%2012th%20National%20Risk%20Assessment.pdf.

Americans will likely continue to flock to many of the areas that face the most peril, as local amenities and favorable economic conditions outweigh the mounting costs of climate risk.

[franklin4]

In other news, the California FAIR insurance program has announced it needs $1 billion from homeowners and insurers to pay claims from the LA fires. So everyone in CA will be contributing to rebuild homes in the Palisades and Malibu (and Altadena but that's not so hard to swallow). I wonder how low and moderate income folks far from LA feel about that and what local and state politicians will have to say. Right after the fires some FAIR official said in an interview they had enough funds to pay claims. I have a hunch the final ask will end up being more than 1B but time will tell...

https://calmatters.org/economy/2025/02/homeowners-insurance-costs-rising-in-california-fair-plan/

[GilesMM]

In other news, the California FAIR insurance program has announced it needs $1 billion from homeowners and insurers to pay claims from the LA fires. So everyone in CA will be contributing to rebuild homes in the Palisades and Malibu (and Altadena but that's not so hard to swallow). I wonder how low and moderate income folks far from LA feel about that and what local and state politicians will have to say. Right after the fires some FAIR official said in an interview they had enough funds to pay claims. I have a hunch the final ask will end up being more than 1B but time will tell...

https://calmatters.org/economy/2025/02/homeowners-insurance-costs-rising-in-california-fair-plan/

Shared risk is the basis of insurance. We can’t ring fence everyone!

[FINate]

In other news, the California FAIR insurance program has announced it needs $1 billion from homeowners and insurers to pay claims from the LA fires. So everyone in CA will be contributing to rebuild homes in the Palisades and Malibu (and Altadena but that's not so hard to swallow). I wonder how low and moderate income folks far from LA feel about that and what local and state politicians will have to say. Right after the fires some FAIR official said in an interview they had enough funds to pay claims. I have a hunch the final ask will end up being more than 1B but time will tell...

https://calmatters.org/economy/2025/02/homeowners-insurance-costs-rising-in-california-fair-plan/

Shared risk is the basis of insurance. We can’t ring fence everyone!

Shared risk within the same risk profile is the basis of insurance. Drivers with poor driving records (at-fault accidents, DUIs, etc.) pay more for insurance because they're in a higher risk class. This is also why auto insurance rates vary by location and vehicle. Seagoing vessels pay different rates depending on the shipping lane and season. Insurance isn't designed to shift costs from high- to low-risk, its purpose is to even out the cost of rare events within a substantially similar risk pool. Risk models are constantly adapting to change and get updated with new information. As we learn more about the effects of climate change, it's very clear that places like Pacific Palisades, Malibu, and Paradise are at very different fire risk levels compared to downtown LA and other urban cores.

[GilesMM]

In other news, the California FAIR insurance program has announced it needs $1 billion from homeowners and insurers to pay claims from the LA fires. So everyone in CA will be contributing to rebuild homes in the Palisades and Malibu (and Altadena but that's not so hard to swallow). I wonder how low and moderate income folks far from LA feel about that and what local and state politicians will have to say. Right after the fires some FAIR official said in an interview they had enough funds to pay claims. I have a hunch the final ask will end up being more than 1B but time will tell...

https://calmatters.org/economy/2025/02/homeowners-insurance-costs-rising-in-california-fair-plan/

Shared risk is the basis of insurance. We can’t ring fence everyone!

Shared risk within the same risk profile is the basis of insurance. Drivers with poor driving records (at-fault accidents, DUIs, etc.) pay more for insurance because they're in a higher risk class. This is also why auto insurance rates vary by location and vehicle. Seagoing vessels pay different rates depending on the shipping lane and season. Insurance isn't designed to shift costs from high- to low-risk, its purpose is to even out the cost of rare events within a substantially similar risk pool. Risk models are constantly adapting to change and get updated with new information. As we learn more about the effects of climate change, it's very clear that places like Pacific Palisades, Malibu, and Paradise are at very different fire risk levels compared to downtown LA and other urban cores.

People in higher risk areas definitely  pay more for insurance but it is sold by the same companies insuring the rest of us so when the company has losses in one state, premiums in another state make up the difference.

[tooqk4u22]

In other news, the California FAIR insurance program has announced it needs $1 billion from homeowners and insurers to pay claims from the LA fires. So everyone in CA will be contributing to rebuild homes in the Palisades and Malibu (and Altadena but that's not so hard to swallow). I wonder how low and moderate income folks far from LA feel about that and what local and state politicians will have to say. Right after the fires some FAIR official said in an interview they had enough funds to pay claims. I have a hunch the final ask will end up being more than 1B but time will tell...

https://calmatters.org/economy/2025/02/homeowners-insurance-costs-rising-in-california-fair-plan/

Shared risk is the basis of insurance. We can’t ring fence everyone!

Shared risk within the same risk profile is the basis of insurance. Drivers with poor driving records (at-fault accidents, DUIs, etc.) pay more for insurance because they're in a higher risk class. This is also why auto insurance rates vary by location and vehicle. Seagoing vessels pay different rates depending on the shipping lane and season. Insurance isn't designed to shift costs from high- to low-risk, its purpose is to even out the cost of rare events within a substantially similar risk pool. Risk models are constantly adapting to change and get updated with new information. As we learn more about the effects of climate change, it's very clear that places like Pacific Palisades, Malibu, and Paradise are at very different fire risk levels compared to downtown LA and other urban cores.

People in higher risk areas definitely  pay more for insurance but it is sold by the same companies insuring the rest of us so when the company has losses in one state, premiums in another state make up the difference.

And that is where the role of government comes into play but typically fails.  Insurance regulators shouldn't be allowing across the board increases or essentially forcing insurance companies to leave the state - they should be auditing and reviewing insurance companies risk assumptions and premiums, but that may make certainly areas unaffordable or uninsurable and not fair to everyone.

But hey, they instead just create a government insurance that has no oversight or experience and well there you go.

[FINate]

In other news, the California FAIR insurance program has announced it needs $1 billion from homeowners and insurers to pay claims from the LA fires. So everyone in CA will be contributing to rebuild homes in the Palisades and Malibu (and Altadena but that's not so hard to swallow). I wonder how low and moderate income folks far from LA feel about that and what local and state politicians will have to say. Right after the fires some FAIR official said in an interview they had enough funds to pay claims. I have a hunch the final ask will end up being more than 1B but time will tell...

https://calmatters.org/economy/2025/02/homeowners-insurance-costs-rising-in-california-fair-plan/

Shared risk is the basis of insurance. We can’t ring fence everyone!

Shared risk within the same risk profile is the basis of insurance. Drivers with poor driving records (at-fault accidents, DUIs, etc.) pay more for insurance because they're in a higher risk class. This is also why auto insurance rates vary by location and vehicle. Seagoing vessels pay different rates depending on the shipping lane and season. Insurance isn't designed to shift costs from high- to low-risk, its purpose is to even out the cost of rare events within a substantially similar risk pool. Risk models are constantly adapting to change and get updated with new information. As we learn more about the effects of climate change, it's very clear that places like Pacific Palisades, Malibu, and Paradise are at very different fire risk levels compared to downtown LA and other urban cores.

People in higher risk areas definitely  pay more for insurance but it is sold by the same companies insuring the rest of us so when the company has losses in one state, premiums in another state make up the difference.

There is no economic law of profits such that a loss in one area is automatically recouped elsewhere. In my state (Idaho) there are no controls on rate increases, but there's a thriving market of providers competing for policies. My current insurance is State Farm and yet I pay substantially less than I did in California. Companies are not price setters (in the sense economics uses this term)... if a company attempts to raise rates higher to make up for losses in CA then a competitor quickly undercuts them.

[bacchi]

Insurance is state regulated anyway. Rates in Kansas can't increase to cover losses in California or Florida (correct me if I'm wrong).

----------
Momentum is gathering:

“If you fast-forward 10 or 15 years, there are going to be regions of the country where you can’t get a mortgage,” [Powell] said during his semiannual testimony to Congress, noting that banks and insurance companies have been pulling out of coastal and fire-prone areas they deem too high risk.

This will be a sea change. A lot of people use their home equity as their main savings account.

[Villanelle]

Insurance is state regulated anyway. Rates in Kansas can't increase to cover losses in California or Florida (correct me if I'm wrong).

----------
Momentum is gathering:

“If you fast-forward 10 or 15 years, there are going to be regions of the country where you can’t get a mortgage,” [Powell] said during his semiannual testimony to Congress, noting that banks and insurance companies have been pulling out of coastal and fire-prone areas they deem too high risk.

This will be a sea change. A lot of people use their home equity as their main savings account.

It feels somewhat arbitrary that you can't ask someone in Kansas to pay more due to the risk (or losses) from CA wildfires, but you can ask someone in San Francisco to pay more for that reason.  Or ask people in Chico and Bakersfield (where the average income is about $33k/year), or other low-income areas to pay for the risk that the Kardashians have by living where they do, or the cost of rebuilding Paris Hilton's mansion. I know the entire system of insurance is spreading out the risk pool, but that doesn't seem fair or reasonable.  Charge Ms. Hilton 10x what she was paying before, rather than charging her and the mechanic in Bakersfield 2x.   

Also, I am yet again glad we sold our CA rental last summer (and it fell out of escrow once due to problem with the buyers getting reasonable insurance, and the buyers that did end up closing struggled a bit with insurance, too). 

[spartana]

I'm still house hunting in coastal SoCal but with the potential for more insurance companies not issuing or renewing new policies, as well as another huge rate increase for homeowners insurance likely to be approved, it might mean it will be impossible to get insurance even in a non-fire prone non-flood prone area. Might have to rethink buying verses renting - although rents have increased wildly since the PP and Altadena fires. Quotes I've gotten have been lowish but fear that we couldn't get a policy at all or could get dumped is an issue.

[ChpBstrd]

JPow was right to note the risk of market illiquidity in “time bomb” areas. What happens to home prices when no buyers can obtain a mortgage because they cannot get insurance? Seems like a recipe for a “fire sale” that could gain momentum. Price declines could lead to much higher foreclosure rates, which could ignite other hidden time bombs: derivatives based on mortgage backed securities. People have already been relying on 3% to 5% down payments for years, so there’s not much of an equity buffer before it makes sense to walk away. This is how we get a 2007-2008 scenario again.

[GilesMM]

Insurance is state regulated anyway. Rates in Kansas can't increase to cover losses in California or Florida (correct me if I'm wrong).

----------
Momentum is gathering:

“If you fast-forward 10 or 15 years, there are going to be regions of the country where you can’t get a mortgage,” [Powell] said during his semiannual testimony to Congress, noting that banks and insurance companies have been pulling out of coastal and fire-prone areas they deem too high risk.

This will be a sea change. A lot of people use their home equity as their main savings account.

State Farm can not ask for a rate increase in Kansas to cover out of state costs, but they will ask for increases in all states (giving other reasons) as they are a national insurer.  As long as they make a profit in aggregate they are happy.  The end result is Kansas profits will subsidize losses elsewhere.

[FINate]

Insurance is state regulated anyway. Rates in Kansas can't increase to cover losses in California or Florida (correct me if I'm wrong).

----------
Momentum is gathering:

“If you fast-forward 10 or 15 years, there are going to be regions of the country where you can’t get a mortgage,” [Powell] said during his semiannual testimony to Congress, noting that banks and insurance companies have been pulling out of coastal and fire-prone areas they deem too high risk.

This will be a sea change. A lot of people use their home equity as their main savings account.

State Farm can not ask for a rate increase in Kansas to cover out of state costs, but they will ask for increases in all states (giving other reasons) as they are a national insurer.  As long as they make a profit in aggregate they are happy.  The end result is Kansas profits will subsidize losses elsewhere.

That's not how companies think about pricing. A for profit company is always going to charge as much as they think the market will bear. As far as I can tell, California is the only state that requires insurers to seek approval before increasing rates. So if State Farm has been leaving money on the table in Kansas then they're a very poorly run business.

If an insurance company is loosing money in California because they cannot charge enough to cover their losses, then the expected response is for them to leave the state. Which is exactly what's been happening.

[GilesMM]

Insurance is state regulated anyway. Rates in Kansas can't increase to cover losses in California or Florida (correct me if I'm wrong).

----------
Momentum is gathering:

“If you fast-forward 10 or 15 years, there are going to be regions of the country where you can’t get a mortgage,” [Powell] said during his semiannual testimony to Congress, noting that banks and insurance companies have been pulling out of coastal and fire-prone areas they deem too high risk.

This will be a sea change. A lot of people use their home equity as their main savings account.

State Farm can not ask for a rate increase in Kansas to cover out of state costs, but they will ask for increases in all states (giving other reasons) as they are a national insurer.  As long as they make a profit in aggregate they are happy.  The end result is Kansas profits will subsidize losses elsewhere.

That's not how companies think about pricing. A for profit company is always going to charge as much as they think the market will bear. As far as I can tell, California is the only state that requires insurers to seek approval before increasing rates. So if State Farm has been leaving money on the table in Kansas then they're a very poorly run business.

If an insurance company is loosing money in California because they cannot charge enough to cover their losses, then the expected response is for them to leave the state. Which is exactly what's been happening.

All 50 states have an insurance commissioner and most or all have a scheme for approving rate increases.

[FINate]

Insurance is state regulated anyway. Rates in Kansas can't increase to cover losses in California or Florida (correct me if I'm wrong).

----------
Momentum is gathering:

“If you fast-forward 10 or 15 years, there are going to be regions of the country where you can’t get a mortgage,” [Powell] said during his semiannual testimony to Congress, noting that banks and insurance companies have been pulling out of coastal and fire-prone areas they deem too high risk.

This will be a sea change. A lot of people use their home equity as their main savings account.

State Farm can not ask for a rate increase in Kansas to cover out of state costs, but they will ask for increases in all states (giving other reasons) as they are a national insurer.  As long as they make a profit in aggregate they are happy.  The end result is Kansas profits will subsidize losses elsewhere.

That's not how companies think about pricing. A for profit company is always going to charge as much as they think the market will bear. As far as I can tell, California is the only state that requires insurers to seek approval before increasing rates. So if State Farm has been leaving money on the table in Kansas then they're a very poorly run business.

If an insurance company is loosing money in California because they cannot charge enough to cover their losses, then the expected response is for them to leave the state. Which is exactly what's been happening.

All 50 states have an insurance commissioner and most or all have a scheme for approving rate increases.

Yes, but how this actually works in practice is complicated. Some states operate under a "file and use" system, with the potential for scrutiny by the insurance commissioner after the fact. In many states insurance companies can easily increase rates as long as they aren't doing anything excessive or abusive. Whereas in California it was, until recently, very difficult to get increases approved. In states with "file and use" and other oversight, I find it hard to believe commissioners would turn a blind eye to rate increase above what's necessary for the local market in order to cover losses in CA.

[franklin4]

In other news, the California FAIR insurance program has announced it needs $1 billion from homeowners and insurers to pay claims from the LA fires. So everyone in CA will be contributing to rebuild homes in the Palisades and Malibu (and Altadena but that's not so hard to swallow). I wonder how low and moderate income folks far from LA feel about that and what local and state politicians will have to say. Right after the fires some FAIR official said in an interview they had enough funds to pay claims. I have a hunch the final ask will end up being more than 1B but time will tell...

https://calmatters.org/economy/2025/02/homeowners-insurance-costs-rising-in-california-fair-plan/

I'm not in CA but it's really interesting how the state deals with home insurance
- does not allow private insurers the freedom to charge rates based on risk
- when insurance is not available in high risk areas, the state provides the insurance but does not price rates appropriately
- when the state doesn't have enough to pay claims after a disaster, private insurance is forced to come up with funds to cover those claims
- rates go up statewide even for policies in low risk areas

another article with more detail
https://www.axios.com/2025/02/12/la-wildfire-losses-fair-plan

a couple highlights
Assuming every insurer requested and received such approval, and based on estimates of around 8 million homeowners' insurance policies in force in the state, the impact would be a little more than $60 per policyholder.
What they're saying: "With peak fire season still ahead, the urgent need for reforms to stabilize California's insurance market and protect consumer access to coverage now and in the future has never been greater," the American Property Casualty Insurance Association said in a statement.
Yes, but: Despite such recommendations, in the early days of the reconstruction, the state's been moving toward less restrictive codes, not more, to accelerate rebuilding.

[spartana]

I have State Farm as my insurer (just have a non-car owners policy currently) and he has Geico on his truck. We put in a cash offer on a place with it being contingent of getting insurance. State Farm quote me about $1500/year which seems reasonable to me and said they are still writing new policies for that area but I keep reading how they might pull out of the state or cancel policies so not sure. I know one couple who has State Farm and had a pipe break and major flooding and needed an expensive renovation that took 3 months (with them living in an airbnb paid for by State Farm). Once everything was completed and they moved back in State Farm cancelled their policy and they haven't been able to get a new one yet. And this was before the big fires. It's scary to contemplate.

[GilesMM]

State Farm has been pretty reliable in CA so far. If they bail on you, just have a local independent search for you. That seems to work well. I don’t know anyone who has not been able to find coverage.

[spartana]

State Farm has been pretty reliable in CA so far. If they bail on you, just have a local independent search for you. That seems to work well. I don’t know anyone who has not been able to find coverage.

That's good to know. They were my former HO insurance as well as umbrella, earthquake and car insurer and I've never had a problem so will likely go with them if they'll write a new policy - which it seems they will. $1500/year is a lot more than I paid before but it's a bit newer house but small and much of the value is in the land rather then the building.

[Telecaster]

People in higher risk areas definitely  pay more for insurance but it is sold by the same companies insuring the rest of us so when the company has losses in one state, premiums in another state make up the difference.

Only indirectly.   Insurance is regulated individually by the states, so the risk pool is typically (or maybe always) limited to one state.   

[FINate]

Some interesting polling data coming out on this, looks like this is starting to affect housing markets: American Homeowners Thinking Twice About Moving to California, Florida

Nearly half of all U.S. homeowners (48 percent) said they would avoid buying a home in states at high risk of natural disasters. California, Florida and Louisiana were the top three states that homeowners would avoid.

Coincidentally, they are also the ones that have faced a spike in home insurance premiums over the past five years—showing the importance that the cost and availability of home insurance can have for homeowners.

[tooqk4u22]

Some interesting polling data coming out on this, looks like this is starting to affect housing markets: American Homeowners Thinking Twice About Moving to California, Florida

Nearly half of all U.S. homeowners (48 percent) said they would avoid buying a home in states at high risk of natural disasters. California, Florida and Louisiana were the top three states that homeowners would avoid.

Coincidentally, they are also the ones that have faced a spike in home insurance premiums over the past five years—showing the importance that the cost and availability of home insurance can have for homeowners.

It is funny how the risk itself doesn't limit anybody moving to those states, but the cost to manage the risk keeps people away.   

[ChpBstrd]

Some interesting polling data coming out on this, looks like this is starting to affect housing markets: American Homeowners Thinking Twice About Moving to California, Florida

Nearly half of all U.S. homeowners (48 percent) said they would avoid buying a home in states at high risk of natural disasters. California, Florida and Louisiana were the top three states that homeowners would avoid.

Coincidentally, they are also the ones that have faced a spike in home insurance premiums over the past five years—showing the importance that the cost and availability of home insurance can have for homeowners.

It is funny how the risk itself doesn't limit anybody moving to those states, but the cost to manage the risk keeps people away.   

Kinda like how tobacco taxes reduce consumption among people who know tobacco causes cancer. I guess we live for the sake of bargain shopping.

[chasesfish]

Fun to see this thread pop back up, I just paid my $1,296 flood insurance premium for my property.  500ft from the ocean but in Flood Zone X

"📦 Penske Truck Rental: Top Moving Destinations (2024)
Penske ranks its top destinations by analyzing one-way truck rental data. In 2024, the top 10 cities were:
Penske

Houston, Texas (No. 1 for four consecutive years)

Atlanta, Georgia

San Antonio, Texas

Dallas, Texas

Orlando, Florida

Charlotte, North Carolina

Las Vegas, Nevada

Chicago, Illinois (Returning – last ranked in 2021)

Austin, Texas

Tampa, Florida"

Houston, Orlando, and Tampa all have hurricane issues yet continue to be in the top 10 of inbound moving destinations.

[tj]

Fun to see this thread pop back up, I just paid my $1,296 flood insurance premium for my property.  500ft from the ocean but in Flood Zone X

"📦 Penske Truck Rental: Top Moving Destinations (2024)
Penske ranks its top destinations by analyzing one-way truck rental data. In 2024, the top 10 cities were:
Penske

Houston, Texas (No. 1 for four consecutive years)

Atlanta, Georgia

San Antonio, Texas

Dallas, Texas

Orlando, Florida

Charlotte, North Carolina

Las Vegas, Nevada

Chicago, Illinois (Returning – last ranked in 2021)

Austin, Texas

Tampa, Florida"

Houston, Orlando, and Tampa all have hurricane issues yet continue to be in the top 10 of inbound moving destinations.

All but 3 cities have no state income tax. Not sure why people are willingly moving to Chicago. Atlanta and Charlotte supposedly are/were cheap growing cities and have a lot of jobs?

I definitely hesitate to buy in CA, especially coastal CA, not just expensive homeowners insurance but also expensive homes with high interest rates. It would take a massive chunk out of my portfolio to drop cash on a property. It's gotta be at least 15-20 years worth of rent just to get a small condo in the least desirable parts of the region, which seems insane.  Hopefully it will make $$$ sense to own somewhere someday again as my place is a bit smaller than I'd like.

[2sk22]

Literally sinking real estate in Florida: https://youtu.be/ntIQcplE1GE?si=tOCN8gmvGqgOc6h2

[chasesfish]

@tj re: Chicago.   It's still the third largest city in the nation and attracts tens of thousands of Big10 graduates a year to start their career.    Not everyone is willing to move more than a few hours away from family and all the metro areas near Chicago are a fraction of it's size.  I worked with a southern guy who played Baseball at Notre Dame and the lightbulb went he was explaining where all his classmates migrated to.   That made the lightbulb go off.

It takes generations to destory the flywheel that is the hub of the upper midwest (even if the City government is trying as hard as they can to do so)