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The state had, IIRC, a $100 billion surplus 2 years ago. They knew the insurers were leaving and why. Yet didn't fund FAIR correctly at the time? Or what's the
by lttlrck 2y ago
The state had, IIRC, a $100 billion surplus 2 years ago.
They knew the insurers were leaving and why. Yet didn't fund FAIR correctly at the time? Or what's the excuse?
Of course now there is a massive deficit. Maybe they'll pay us back on the next surplus...
- nickff 2y agoFrom what I understand (and I’d appreciate any corrections) FAIR was supposed to pay for itself, not be a subsidized insurer. It seems like FAIR was underpricing the risk, and the private insurers were right to pull out.
- readthenotes1 2y agoIt didn't work out well... "FAIR Plan has about $300 billion in total exposure, meaning how much they actually insure, and about $200 million in the bank," - March 2024 https://www.cbsnews.com/sanfrancisco/news/california-fair-plan-insurer-of-last-resort-warns-major-disaster-could-wipe-out-funds/ https://www.cbsnews.com/sanfrancisco/news/california-fair-pl...
- Sakos 2y agoWhy would the state pay to fund FAIR? It's just a pool of insurers required to provide fire insurance and it's paid for by insurance customers. Even if the state had $100 billion surplus, why would it be justifiable to use it on FAIR as opposed to the countless other ways the money could be used to help Californian residents? It would effectively be like taxing Californians to pay for homeowner fire insurance. Is that fair?
- plasticchris 2y agoThey never actually had that surplus, it was projected revenue. The projections were wrong - they extrapolated, then planned spending around that. Source: https://calmatters.org/commentary/2023/10/california-budget-whiplash-pitfalls-forecasting/ https://calmatters.org/commentary/2023/10/california-budget-...
- linotype 2y agoIf they put the money into a fund, you would have complained that the government was overtaxing the citizens.
- blackeyeblitzar 2y agoThe problem is the same thing that leads to many California problems - it’s the leaders voters keep choosing. One party states tend to be wasteful and ineffective. More details on the insurance debacle, which basically is classic over regulation: https://youtu.be/ojzUtQlug3I https://youtu.be/ojzUtQlug3I
- jerlam 2y agoCalifornia has budget rules that cap its ability to save money from surpluses and require it to issue refunds: https://www.capradio.org/articles/2024/01/22/how-california-budget-rules-can-prevent-saving-for-a-rainy-day-and-why-newsom-wants-to-change-that/ https://www.capradio.org/articles/2024/01/22/how-california-...