3 ms·

https://www.clydeco.com/en/insights/2025/01/california-wildfires https://www.clydeco.com/en/insights/2025/01/california-wildf... > The Bulletin was issued purs

https://www.clydeco.com/en/insights/2025/01/california-wildfires https://www.clydeco.com/en/insights/2025/01/california-wildf... > The Bulletin was issued pursuant to California Insurance Code section 675.1(b)(1), which states that an insurer “shall not cancel or refuse to renew a policy of residential property insurance for a property located in any zip code within or adjacent to the fire perimeter, for one year after the declaration of a state of emergency . . . based solely on the fact that the insured structure is located in an area in which a wildfire has occurred.”

BeetleB 2y ago
I imagine this won't apply if the insurer just leaves the state.
- PaulDavisThe1st 2y ago
  Yep. These are terms to operate as an insurance company in the state. If you don't want to do that, the rules have no bearing on you.
  - qeternity 2y ago
    Which effectively means that anybody in a less risky area of California is just subsidizing those who live in the risky areas. Premia across the board will increase as a result. Typical California redistribution...but this is from the bottom to the top.
    - PaulDavisThe1st 2y ago
      > Which effectively means that anybody in a less risky area of California is just subsidizing those who live in the risky areas. Do you not understand that this is precisely how insurance works?
      - qeternity 2y ago
        No. That’s not subsidization. Of course insurance is about pooling risk. But subsidizing implies you’re doing it below market rates. If I pay my market rate but still -EV insurance premium, I’m not subsidizing anyone. I’m just happy to pay for the convexity insurance provided. If I have to pay 20% more than I otherwise would, because the insurance company can’t charge someone else 20% more, that is actual subsidization. A subsidy distorts natural market forces. This is what I am talking about. Don’t be so quick to be a dick.

BeetleB 2y ago

I imagine this won't apply if the insurer just leaves the state.

PaulDavisThe1st 2y ago
Yep. These are terms to operate as an insurance company in the state. If you don't want to do that, the rules have no bearing on you.
- qeternity 2y ago
  Which effectively means that anybody in a less risky area of California is just subsidizing those who live in the risky areas. Premia across the board will increase as a result. Typical California redistribution...but this is from the bottom to the top.
  - PaulDavisThe1st 2y ago
    > Which effectively means that anybody in a less risky area of California is just subsidizing those who live in the risky areas. Do you not understand that this is precisely how insurance works?
    - qeternity 2y ago
      No. That’s not subsidization. Of course insurance is about pooling risk. But subsidizing implies you’re doing it below market rates. If I pay my market rate but still -EV insurance premium, I’m not subsidizing anyone. I’m just happy to pay for the convexity insurance provided. If I have to pay 20% more than I otherwise would, because the insurance company can’t charge someone else 20% more, that is actual subsidization. A subsidy distorts natural market forces. This is what I am talking about. Don’t be so quick to be a dick.