Insurance companies are required to keep reserves far in excess of the premiums they collect. And they also buy reinsurance to insure themselves against catastrophic losses like the one in California. CA regulators would not allow insurance companies to charge their insureds for the cost of the reinsurance. That is one of many roadblocks…
Insurance companies are required to keep reserves far in excess of the premiums they collect. And they also buy reinsurance to insure themselves against catastrophic losses like the one in California. CA regulators would not allow insurance companies to charge their insureds for the cost of the reinsurance. That is one of many roadblocks for insurance companies to charge a premium commensurate to the risk they take on. The insurance companies are not to blame. There is no "naked/unbacked insurance" in the home insurance market. Each state regulates insurers within their state, and California's regulators have tied the hands of the insurers. That is why they're leaving.
Insurance companies are required to keep reserves far in excess of the premiums they collect. And they also buy reinsurance to insure themselves against catastrophic losses like the one in California. CA regulators would not allow insurance companies to charge their insureds for the cost of the reinsurance. That is one of many roadblocks for insurance companies to charge a premium commensurate to the risk they take on. The insurance companies are not to blame. There is no "naked/unbacked insurance" in the home insurance market. Each state regulates insurers within their state, and California's regulators have tied the hands of the insurers. That is why they're leaving.