Insurers have been grappling with the impact of inflation, which has led them to seek regulatory approval for rate increases in order to offset rising claim costs. As an example, USAA, based in San Antonio, recently experienced its first annual loss in its 100-year history, amounting to a setback of $1.3 billion. In California, insurers have faced the challenge of high wildfire risks, prompting many of them to reduce coverage in areas prone to wildfires or impose stricter criteria for homes lacking certain fire-prevention attributes. These attributes can include building materials and maintaining sufficient clearance between structures and nearby trees, Zero Hedge said, while others have blamed California's left-wing environmental policies that do not promote adequate care of forest beds. State Farm appeared to indicate that California officials attempted to make the situation better but were unable to do so. "We take seriously our responsibility to manage risk. We recognize the Governor’s administration, legislators, and the California Department of Insurance (CDI) for their wildfire loss mitigation efforts. We pledge to work constructively with the CDI and policymakers to help build market capacity in California. However, it’s necessary to take these actions now to improve the company’s financial strength," the insurer said. Zero Hedge added: The property insurance situation in the Golden State is spiraling into crisis, and horror stories abound. For example, consider a San Diego County homeowners association (HOA) comprising 187 townhouses. The HOA had been paying $54,000 for property insurance. After the policy was non-renewed, the HOA ended up with a new carrier charging a $293,000 premium -- prompting an emergency assessment from each owner. California already has a notoriously high cost of living, ranking second only to Hawaii in the percentage of homeowners (29.7%) who spend more than 30% of their gross income on housing costs. The departure of the country's largest home insurance provider won't do anything to help the insurance component of those costs. California's collapse is coming. It's just a matter of when. Sources include: ZeroHedge.com CBS8.comHuge blow for California home owners. State Farm was the only insurer I could find that would insure my home. https://t.co/e5FiMB4kSH
— Michael McQuaid (@michaelgmcquaid) May 27, 2023
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