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As the governments in the US get increasingly incompetent, insurance prices are going to have to rise. Government services are largely there to protect you duri
by pclmulqdq 2y ago
As the governments in the US get increasingly incompetent, insurance prices are going to have to rise. Government services are largely there to protect you during black swan events, so if those services get less and less effective, you're going to need more insurance for those events.
- crawftv 2y agoThis was the whole issue. California made it illegal for insurance companies to raise rates, so the insurance companies stop renewals. Leaving everybody uninsured. Homeowners couldn't buy insurance at any price.
- Firaxus 2y agoIt’s regulated, not illegal. “Experts say the insurance landscape in California is particularly tricky because, in addition to the wildfire risk, the state has a law that adds extra approval measures, including board approval and review by the insurance commissioner, if an insurance company wants to raise the rate of insurance by more than 7%. That’s been in effect since the 1980s.” https://www.cnbc.com/2024/02/05/what-homeowners-need-to-know-as-insurers-leave-high-risk-climate-areas.html https://www.cnbc.com/2024/02/05/what-homeowners-need-to-know...
- dnissley 2y agoIllegal seems fine as shorthand though. Same with housing -- "illegal" to build in many instances. Not technically illegal of course, but enough hurdles makes it effectively so.
- Analemma_ 2y agoIf it's not permitted to raise the price of premiums to point where it covers the actual risk, then it's de facto illegal. Nobody will sell insurance policies at a loss.
- amarcheschi 2y agoBut that's not what it's said
- wrfrmers 2y agoPublic insurance. For housing, healthcare, maybe even cars (since the coprorate political complex insists that we HAVE to drive everywhere). At some point, we have to accept that the middlemen are siphoning value, not providing any. Vanguard it and let elected admins set the codes.
- hallway_monitor 2y agoIt does seem like it's time to stop letting this "industry" profit off the misfortune of its customers. Making all of these a public service instead of private industry makes sense at this point.
- MajimasEyepatch 2y agoThe profit margins on insurance are usually pretty slim. Insurance companies are generally not well differentiated from one another, so they have few avenues to compete other than on price. A state-run insurance plan also has to operate at a profit/surplus or else it will have to be subsidized by the taxpayers. The effect is the same either way.
- onlypassingthru 2y agoSlim from a percentage of total premiums but substantial when looking at the absolute dollar amount of profits. It's all relative to the size of the pie.
- bruce511 2y agoThe absolute value is only meaningful when compared to the amount of capital invested. Its also only meaningful when measured over a long period which takes good years and bad years into account.
- MajimasEyepatch 2y agoAlso, when margins are slim, a major event (like a series of wildfires in one of the biggest cities in the US) can wipe out those profits. A responsible insurer can withstand one bad year. But if those major events start happening with more frequency, then one bad year becomes a series of bad years. Reinsurance premiums for the insurer go up, meaning that taking on risk is more expensive, and they’ll eventually have to decide between raising their own premiums to unsustainable levels or pulling out of risky markets.
- dfxm12 2y agoI don't think it is incompetence of the governments. It appears to be a goal of most US politicians to add to the coffers of private business, insurance companies included, at the expense of all but the most rich Americans.
- Alive-in-2025 2y agoI'd finish your comment with "it's a goal of most US politicians ... to enrich the most wealthy Americans".
- desmosxxx 2y agoThen why are private insurers being pushed out of California?
- rattlesnakedave 2y agoThese aren’t black swan events. These are swan events, if anything.