www.washingtonexaminer.com Open in urlscan Pro
2606:4700::6812:45b  Public Scan

Form analysis
1 forms found in the DOM

https://www.washingtonexaminer.com/search-result

<form class="FixedHeader-search-form" action="https://www.washingtonexaminer.com/search-result" novalidate="" autocomplete="off">
  <input type="text" aria-label="Search" class="FixedHeader-search-input" placeholder="Search Term" name="q" data-searchahead="">
  <button type="reset" class="FixedHeader-search-clear">Clear</button>
  <button type="submit" class="FixedHeader-search-submit">Search</button>
</form>

Text Content

 * News
    * White House
    * Senate
    * House
    * Campaigns
    * Business
    * Justice
    * Crime
    * Sunday Talk Shows
    * Washington Secrets

 * Policy
    * Defense & National Security
    * Energy & Environment
    * Education
    * Immigration
    * Finance & Economy
    * Healthcare
    * Foreign Policy
    * Technology
    * Infrastructure
    * Space
    * Think Tanks

 * Opinion
    * Columnists
    * Editorials
    * Beltway Confidential

 * Watch
    * Latest Clips
    * The Debrief
    * Reporter's Notebook

 * Restoring America
 * Newsletters
 * Subscriber Content
    * Member Login
    * Magazine
    * Archive
    * Quarterly Briefing
    * Book of the Month

Sign In| Subscribe
 * My Account
 * WEX Access
 * Contact Us
 * Logout

Clear Search
Sign In| Subscribe
 * My Account
 * WEX Access
 * Contact Us
 * Logout




Wednesday, June 28, 2023
Wednesday, June 28, 2023
Sign In| Subscribe
 * My Account
 * WEX Access
 * Contact Us
 * Logout

 * News
    * White House
    * Senate
    * House
    * Campaigns
    * Business
    * Justice
    * Crime
    * Sunday Talk Shows
    * Washington Secrets

 * Policy
    * Defense & National Security
    * Energy & Environment
    * Education
    * Immigration
    * Finance & Economy
    * Healthcare
    * Foreign Policy
    * Technology
    * Infrastructure
    * Space
    * Think Tanks

 * Opinion
    * Columnists
    * Editorials
    * Beltway Confidential

 * Watch
    * Latest Clips
    * The Debrief
    * Reporter's Notebook

 * Restoring America
 * Newsletters
 * Subscriber Content
    * Magazine
    * Archive
    * Quarterly Briefing
    * Book of the Month


California


HOME INSURERS PULL OUT OF CALIFORNIA THANKS TO WILDFIRES AND STATE REGULATIONS

by Breanne Deppisch, Energy and Environment Reporter
June 01, 2023 12:42 PM
 * 
 * 
 * 
 * 
 * 


LATEST

Paul Ryan: Republicans 'much more likely to lose' if Trump gets nomination
By: Julia Johnson

The Education Department escalates Biden's war on parents
By: Hudson Crozier

Hunter Biden invoking 'my father' resulted in millions flowing from CCP-linked
company
By: Jerry Dunleavy



VIDEOS

Andrea Mitchell bashed by liberals after pointing out that Biden's age is real
concern

Flight delays and cancellations stack up ahead of holiday weekend travel

Anheuser-Busch CEO commits to supporting LGBT while listening to consumers

Tucker Carlson claims hypocrisy in Ukraine's war for 'democracy'



NEWSLETTERS


Sign up now to get the Washington Examiner’s breaking news and timely commentary
delivered right to your inbox.

More Videos ‹

01:44
Next Video
1. Home insurers pull out of California thanks to wildfires and state
regulations
01:42
Next Video
2. Delaware lawmaker launches run to become first transgender member of Congress
02:04
Next Video
3. Missing Titanic sub: US Navy microphones picked up vessel's implosion days
ago
01:14
Next Video
4. WEX MIN: Schiff censure is “badge of honor,” TikTok data stored in China, 73%
disapprove...
01:42
Next Video
5. Obesity changes brain chemistry: What new research means for healthcare
03:05
Next Video
6. Abbott signs Save Women's Sports Act & Sen. Josh Hawley talks Father's Day
01:38
Next Video
7. Manchin blasts Biden and Democrats' 'craziness' on gas stove plans
01:20
Next Video
8. Planned Parenthood suing Kansas over 'abortion reversal': The science to know
01:44
Next Video
9. Starting pistol: 'Tidal wave' of gun laws struck down a year after Supreme
Court Bruen...
03:42
Next Video
10. Donald Trump indicted & NY sends forest rangers to help fight blazes in
Quebec
01:48
Next Video
11. Wildfire smoke: Tracking air quality, causes, and effects as Canadian
wildfires continue
01:40
Next Video
12. DC air quality plummets due to Canadian wildfires
01:43
Next Video
13. COVID relief funding being used to host drag shows
01:49
Next Video
14. Texas House hands Ken Paxton impeachment articles to Senate
01:56
Next Video
15. Reparation Nation: The country's first reparations program for black
Americans
01:31
Next Video
16. CNN To Host Town Hall With Pence Next Month As 2024 Presidential Decision
Looms
01:51
Next Video
17. Fact Check Does Immigration Increase Housing Costs
02:16
Next Video
18. Republicans rip Biden for trying to insert taxes in debt ceiling deal
01:40
Next Video
19. Ex-FDA Commissioner Pins Drug Shortage On Inflation Reduction Act
04:43
Next Video
20. Cracking the Code: Sarah Bedford and Tim Carney decode Sam Altman's AI
regulation push
01:33
Next Video
21. Celebrity chef Jose Andres exempted from Palo Alto gas stove ban

Unmute
Loading Ad

 
00:00
/
01:44

LIVE









State Farm said this month it will stop insuring new homes in California,
joining a growing list of insurers that have reduced operations in the Golden
State in response to rising wildfire exposure and a challenging reinsurance
market.

State Farm, which cited historic increases in construction costs, “rapidly
growing” catastrophe risks, and reinsurance market challenges as the reasons
behind its decision, is the largest provider of homeowners insurance in the
state, protecting an estimated 22% of residents.

BIDEN WORKS TO PUSH DEBT CEILING DEAL OVER THE FINISH LINE

And it is not the only one looking to cut its losses in the wildfire-prone
state. Other insurance providers, including AIG and Chubb, have declined to
renew policies for thousands of homeowners living in California, citing similar
risks of climate catastrophe and a pricing structure that does not allow for
them to increase their premiums accordingly.

The number of homeowners in California who have lost coverage has soared in
recent years, and nonrenewal of home insurance policies spiked by a whopping 30%
in 2021 compared to the previous year, according to the most recent data from
the California Department of Insurance.

That's led to an insurance market that's more competitive and costly for
homeowners than ever before.

California officials have said that a rise in climate change-fueled disasters is
the primary problem. Others, though, say that poor management and regulation are
to blame — pointing to California's 1988 insurance law as the primary driver of
State Farm's exit.

Regulatory factors in California "have really been the hidden driver" causing
insurers to reduce their footprint in the state, Jerry Theodorou, the director
of the finance, insurance, and trade program at the R Street Institute, told the
Washington Examiner.

While "plenty of other states have seen a rise in natural catastrophes" in
recent years, none have seen a drop-off in property insurance the way California
has, he said.

California is not the only state hit hard by the effects of weather-induced
catastrophe — Florida, for example, incurred roughly $109 billion in damages
from Hurricane Ian last fall, making it the third-costliest hurricane in U.S.
history — it is the only state that requires insurers take into account 20 years
of historical data when setting their premiums.

That means property insurers in California can’t adequately price for risks from
wildfires or other climate catastrophes that have ravaged the state in recent
years, thanks to a combination of hotter temperatures, drought, and poorly
managed forests. And as a result, they are leaving the state at a rate not seen
in other parts of the United States.

"The evolution of really what the exposure [to drought and wildfires] has been
in California, coupled with all these other economic factors, have really
created a lot of financial pressure for companies," Karen Collins, vice
president of property and environmental policy at the American Property and
Casualty Insurance Association, told the Washington Examiner.

Losses incurred during the 2017 and 2018 wildfire seasons alone were so
significant that they wiped out more than 20 years of underwriting profits.



As a result, Collins said, companies are "unable to leverage catastrophic risk
management tools like catastrophe models to take into account the impacts of
climate change in setting their overall rate level needs. And they are [unable]
to reflect the net cost of reinsurance in their pricing — and those costs have
surged substantially just in the last few years."

Insurance companies also purchase their own insurance, known as reinsurance, as
a sort of shock absorber to help them manage losses past a certain point in the
event of disaster.

While reinsurance premiums have spiked in recent years to reflect the uptick in
extreme weather, providers in California, unlike other states, are barred under
state law from passing those costs along to consumers.

Each year, insurance companies evaluate what percent of their losses was the
result of natural disasters — historically, this falls around 6% — and will then
set different coverage and deductible options for consumers, as well as
determine the reinsurance they plan to buy.

Not being able to reflect those rates in premiums has made it extraordinarily
difficult, and expensive, for providers to do business in the Golden State.

Insurance companies can cover climate risk and weather risk, "but they need the
flexibility to adjust their pricing and their coverage so that it's something
that doesn't bankrupt them," Theodorou said.

Looking ahead

These problems are likely to get worse for homeowners as California endures more
widespread and intense wildfires affecting more properties than ever before —
and as reinsurance rates continue to spike.

“You have these conditions which are different. And actuaries, the quantitative
folks at the insurance companies that determine rates, need to factor in the
exposure, not just the experience," Theodorou said.

Global insured losses from catastrophes were anticipated to reach at least $15
billion in the first quarter of 2023 alone, according to insurance broker Aon.
Reinsurance providers have upped their rates accordingly.

But without the ability to increase their premiums to reflect risk or the higher
costs of their own reinsurance premiums accurately, more providers in California
could follow in State Farm's footsteps —leaving new homeowners with fewer
options to obtain insurance.

Those without coverage could also be forced to turn to California's FAIR Plan,
or an "insurance company of last resort," which consumers can turn to when no
private insurers will cover them.

Coverage is limited, high risk, and only covers those who can prove they've been
denied coverage by other providers.

It's not a lucrative option, but it could be the only one left for homeowners
unless California lifts its current regulations — which APCIA dubbed in a recent
white paper as the "hardest market in a generation for property insurance."

CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER

Actuaries must look at both experience and exposure ratings to determine where
to set premiums. "The right way to do it is to look at the factors that tell you
what is the exposure, what is the potential for loss, what is the likelihood of
a loss. Then you're pricing it more accurately and you can stay in business,"
Theodorou explained.

"But if someone is tying your hands and saying no, you can't charge this amount,
the company's hands are tied. And if they see that they're losing money or
bleeding red ink, they pull up stakes and then go to places where they can make
a buck.”


LATEST

Paul Ryan: Republicans 'much more likely to lose' if Trump gets nomination
By: Julia Johnson

The Education Department escalates Biden's war on parents
By: Hudson Crozier

Hunter Biden invoking 'my father' resulted in millions flowing from CCP-linked
company
By: Jerry Dunleavy



VIDEOS

Andrea Mitchell bashed by liberals after pointing out that Biden's age is real
concern

Flight delays and cancellations stack up ahead of holiday weekend travel

Anheuser-Busch CEO commits to supporting LGBT while listening to consumers

Tucker Carlson claims hypocrisy in Ukraine's war for 'democracy'



NEWSLETTERS


Sign up now to get the Washington Examiner’s breaking news and timely commentary
delivered right to your inbox.

California
News
Climate Change
Regulation
Gavin Newsom
Energy and Environment
Energy
Videos
 * 
 * 
 * 
 * 
 * 

Share your thoughts with friends.
Paid Content



Manage Cookies
 * About Examiner
 * Magazine Archive
 * Staff
 * Policies and Standards
 * Sitemap
 * Terms Of Service
 * Privacy Policy
 * Your Privacy Choice
 * Transparency In Coverage
 * Advertise
 * Contact
 * Subscribe
 * Newsletters
 * Careers
 * Facebook
 * Twitter

COPYRIGHT 2023. WASHINGTON EXAMINER. ALL RIGHTS RESERVED.



We and certain third parties may use cookies or similar technologies to process
data when you visit our sites. This data may relate to your use of our sites,
your preferences, your device, or other information about you. We and third
parties may use this information for a variety of purposes, such as enabling the
sites to function, to personalize your experience when using our sites, to
provide you with advertisements based on your interests, and for analytical
purposes. Privacy Notice

Manage Cookies Reject All Accept All



PRIVACY PREFERENCE CENTER

You may use the category buttons below to enable or disable cookies or similar
technologies used for each purpose. Click on the different category headings to
find out more and change our default settings. Disabling some types of cookies
or similar technologies may impact your experience when using our sites. You may
disable all cookies/similar technologies (except those that are strictly
necessary) by changing your settings below. The cookie preference tool is device
and browser specific. If you delete or clear cookies or change devices or
browsers, you may need to reset your cookie preferences. You may also enable the
Global Privacy Control to opt out of targeted advertising.
More information
Allow All


MANAGE CONSENT PREFERENCES

ESSENTIAL COOKIES

Always Active

These technologies are necessary for us to deliver our services to you. For
example, these technologies allow us to load content on the page, perform
security functions, or store mandatory preferences (e.g. opt-out of sale
preferences). These technologies cannot be disabled, and if you configure your
browser to block these features, our services or certain features may not
function.

TARGETED ADVERTISING COOKIES

Targeted Advertising Cookies

These cookies enable us and our advertising partners to serve you with relevant
targeted advertisements based on your interests and profiles held by us or our
advertising partners and ad networks. You might see these advertisements on our
sites or on other sites you visit. These technologies may collect information
about you on our site, as well as third-party sites, and these technologies may
be used to associate the information collected across sites and contexts. If you
disable these technologies, you will still see ads, but they may be less
relevant.

ANALYTICS COOKIES

Analytics Cookies

These technologies are used to analyze the use and performance of our services
so that we can measure and improve those services. For example, we may create
analytics designed to understand how many people visit our websites, how they
reach us, how they navigate the services, how the service performs, and what
content is popular. This allows us to improve your experience on our services,
and if you disable these services, our sites may not perform optimally.

FUNCTIONAL COOKIES

Functional Cookies

These technologies are used to provide specific features or functions of our
site or to personalize your experience. For example, these technologies are used
to maintain log-in sessions for registered users or to store your preferences
(e.g. regarding the use of cookies). If you disable these technologies, the
features may not function properly, and you may be required to reconfigure your
preferences.

Back Button


COOKIE LIST



Search Icon
Filter Icon

Clear
checkbox label label
Apply Cancel
Consent Leg.Interest
checkbox label label
checkbox label label
checkbox label label

Confirm My Choices