Dozens Died in California Wildfires. Why Is the State Forcing Insurance Companies To Ignore Risks?
In another life your editor was a Property and Casualty insurance underwriter. He looked at risk to homes and cars from various hazards. In some states however this was very difficult because regulations did not let us assess risk accurately. We had to dismiss various risk factors, usually for political reasons. This seems to be the case in California. Insurance companies should be able to charge high rates of insurance for people who live on ridgelines surrounded by dry scrubland, places where fire is part of the way nature renews itself.
The problem is that many of the people living on picturesque ridge lines in California tend to be politically connected. Insurance companies are not allowed to charge appropriate rates for these people. This means that people in low risk areas must then pay higher rates to subsidize the people up on the ridge lines of the Hollywood Hills.
(From Reason)
California seems hellbent on prohibiting market solutions from fixing that third problem. The state’s insurance commissioner has announced that the state is mandating that companies that provide fire insurance cannot drop coverage of properties within the areas affected by wildfires. This is the second year in a row he has done so.
This article was originally posted here: https://www.ac2news.com/2020/11/dozens-died-in-california-wildfires-why-is-the-state-forcing-insurance-companies-to-ignore-risks/.
