When They Cancel More Insurance Policies They Will Be Evil

State Farm can't afford to do business in California. Big homeowner rate hike from State Farm shot down by California regulator

State Farm has said that it needs a 22% rate increase due to the wildfire risk, which is elevated because the State of California can't be bothered to do things like put electric lines underground, and clear brush from their forests. They are too busy spending billions of dollars on high speed rail to nowhere.

California Insurance Commissioner Ricardo Lara today rejected State Farm’s request for “emergency” rate increases, setting up what could be a highly consequential showdown with the state’s biggest insurer — and going against the recommendation of his staff experts.

Lara, who has been urging insurance companies to write policies in the state again despite increasing wildfire risks, says in a letter to State Farm executives that he needs more information before he can approve an increase.

So the lack of policies being written is a problem, and the problem is wildfire. So why doesn't the insurance commissioner want to fix the problem? "Urging" insurers to write policies guaranteed to produce a loss is stupid. You can urge all you want. They won't write policies until they believe that they can make money. That is how capitalism works.

State Farm said in a written statement today that it “must seriously consider its options within the California insurance market going forward.”

Translation: We are figuring out how to cut our losses and run for the exit.