Two of Californias largest insurance providers have ceased offering new coverage to property owners in the nations most populous state. Politicians, the press, and corporate spokesmen eager to protect their Wall Street environmental, social, and governance (ESG) scores are blaming climate change, but the true culprit is incompetent governance.
Allstate joined State Farm last week to discontinue applications for new property coverage in California, which has been ravaged by wildfires that have consumed entire communities. Last month, State Farm, which insures more property in California than any other company, declared a halt to new policies, citing historic increases in construction costs combined with rapidly growing catastrophe exposure. Allstate, Californias fourth-largest property and casualty insurance provider, quietly did the same, according to the San Francisco Chronicle on Thursday.
The pause began last year but appeared to receive only a passing mention in industry publications, the Chronicle reported. That Allstate and State Farm are ceasing coverage on the West Coast signals that insurance woes in the state may be more severe than the public is aware of.
The two insurance giants cover more than 13 percent of Californias property and casualty market share. Allstate told the Chronicle the firm paused new policies so we can continue to protect current customers.
Residents in fire-prone areas have already struggled to guarantee home insurance from companies wary of the potential wildfires that set the state ablaze every year. High-end insurers AIG and Chubb pulled back coverage in California last year, citing fire risk.
The depressed market has forced more homeowners to take advantage of the state-backed FAIR Plan, an insurer of last resort that usually costs more and covers only fire damage. FAIR Plan policies began to cover 3 percent of the market in 2021, up from just 1.6 percent in 2018.
Meanwhile, headlines covering the California insurance industry blame the property owners predicament on the existential climate crisis.
Climate change is already making parts of America uninsurable, Vox titled its coverage.
Climate change is making California more expensive. Home insurance is the latest bellwether, the Los Angeles Times headlined an editorial.
Climate-fueled insurance crisis hits California, read another headline in Politico.
But its not climate change powering the destruction of the insurance market. Its poor public policy.
Californias annual devastation is preventable with proper land management. More than 100 years of fire suppression, however, has left forests in the American West overgrown, presenting nearby residents with massive tinderboxes ready to flare up into massive conflagrations that send smoke as far as Europe.
Accordingto ProPublica, Academics believe that between 4.4 million and 11.8 million acres burned each year in prehistoric California. Between 1982 and 1998, however, state bureaucrats only burned an average of 30,000 acres a year. That number fell to 13,000 acres from 1999 to 2017.
Meanwhile, environmental prohibitions on roads and salvage logging in forested areas inhibit efforts to combat wildfires by hampering firefighters access to burning areas.
[READ: California Wildfire Devastation Was Entirely Preventable Through Proper Land Management]
Both state and federal officials are now years behind in California forest management, sending insurers fleeing. Democrat Gov. Gavin Newsom even cut the states budget for wildfire prevention and resource management by more than 40 percent.
Myriad public policies are making it harder for insurance companies to operate economically in the fire-prone state. Not only are California blazes becoming harder to control from the buildup of fuels, but state law handicaps how insurers establish premiums.
A ballot measure passed in 1988 has led insurance companies to calculate rates based on the prior 20 years instead of forward-looking projections.
Unable to account fully for wildfire risk, insurers instead have canceled or declined to renew policies in wildfire-prone areas, E&E News reported. In 2019, after two consecutive years of massive wildfires in California, the number of insurer cancellations or nonrenewals shot up to 235,000 from 165,000 in 2018, state figures show.
State law also de facto caps how high companies can lift insurance premiums. When insurers try to lift rates beyond 7 percent, companies risk triggering a costly process wherein the increases are challenged. In the end, the companies lose out due to inflation cutting the real rate increase to 1 or 2 percent.
Four years ago, the California insurance commissioner amplified risk by temporarily barring insurers from dropping customers in areas hit by wildfires four years ago. The insurance commissioner also issued a directive for companies to increase discounts last year.
Even California labor law will make it more difficult to sustain a healthy insurance industry, let alone healthy land. The Associated Press reported last week that regulations passed by the state legislature in 2016 will spike overtime pay for goat herders and threatens to put them out of business.
Targeted grazing, wherein livestock devours vegetation and thus clears out wildfire fuel, is a primary instrument of land management. Goats are able to reach steep terrain that is otherwise difficult to access, allowing goat herders to deploy an eco-friendly alternative to chemical herbicides for clearing.
But the new state labor regulations will treat goat herders under the same category as other farm workers.
That would mean goatherders would be entitled to ever higher pay up to $14,000 a month, the AP reported. Goat-herding companies say they cant afford to pay herders that much. They would have to drastically raise their rates, which would make it unaffordable to provide goat grazing services.
Fewer goats mean fewer animals to clear out overgrown vegetation, leading to even larger fires, more destruction, and higher insurance costs.
Media, lawmakers, and corporate America can blame the so-called climate crisis all they want, but its clear the real offenders in Californias insurance disaster are those mismanaging the state.
More here:
Bad Governance Jeopardizes California Home Insurance - The Federalist
- Court: Trump Can Appeal Attempt To Disqualify Fani Willis - The Federalist - March 20th, 2024 [March 20th, 2024]
- Media Give Blasey Ford Another Chance To Smear Kavanaugh - The Federalist - March 20th, 2024 [March 20th, 2024]
- Exclusive: Jordan Demands Docs From CISA About PA Election 'Task Force' - The Federalist - March 20th, 2024 [March 20th, 2024]
- The Columns Spotlight: The Federalist Society Washington and Lee University - The Columns - March 20th, 2024 [March 20th, 2024]
- Democracy Under Pressure at the EU Level - The New Federalist - Le Taurillon - March 20th, 2024 [March 20th, 2024]
- Justice Jackson's 'Hamstringing' Comment Wasn't Her Worst - The Federalist - March 20th, 2024 [March 20th, 2024]
- Andrei Illarionov and Morgan Wirthlin, Author at The Federalist - The Federalist - March 20th, 2024 [March 20th, 2024]
- Democracy Under Pressure in Hungary - The New Federalist - Le Taurillon - March 20th, 2024 [March 20th, 2024]
- Mike Johnson Needs To Grow A Spine And Fight Biden's Border Invasion - The Federalist - March 20th, 2024 [March 20th, 2024]
- High Gas Prices Don't Bother Biden Because They Cut Car Use - The Federalist - March 20th, 2024 [March 20th, 2024]
- Hemingway: All Of Biden's Interactions With The Press Are Coordinated And Protected - The Federalist - March 20th, 2024 [March 20th, 2024]
- Zuckbucks Group Teaches Election Offices How To Target Speech - The Federalist - March 20th, 2024 [March 20th, 2024]
- Gov't Says 'Once-In-A-Lifetime Pandemic' Excuses First Amendment Violations - The Federalist - March 20th, 2024 [March 20th, 2024]
- Speaking Openly About Isolation Can Help Us Resist Tyranny - The Federalist - March 20th, 2024 [March 20th, 2024]
- Trans Zealots Revolt Against Reality Rather Than Admit They're Wrong - The Federalist - March 20th, 2024 [March 20th, 2024]
- Trump's 'Bloodbath' Is The Fake Media's New 'Guy' And 'Sir' - The Federalist - March 20th, 2024 [March 20th, 2024]
- It's Time For Georgia's AG To Indict Fani Willis For Perjury - The Federalist - March 20th, 2024 [March 20th, 2024]
- What's New In Bragg's 'Get Trump' Hush Money Lawfare In NY - The Federalist - March 20th, 2024 [March 20th, 2024]
- Clutch Your Pearls, This Isn't The Last Trump 'Bloodbath' - The Federalist - March 20th, 2024 [March 20th, 2024]
- DC Doesn't Just Spend Too Much, It Spends On The Wrong Things - The Federalist - March 20th, 2024 [March 20th, 2024]
- CNN Analyst Asks Feds To Meddle In Elections To Defeat Trump - The Federalist - March 20th, 2024 [March 20th, 2024]
- NYC Subway Shooting Is A Result Of 'Tolerance And Diversity' - The Federalist - March 20th, 2024 [March 20th, 2024]
- Keeping Trump In Court While Biden Campaigns Is Election Interference - The Federalist - March 20th, 2024 [March 20th, 2024]
- Disenchanted Democrats Should Be Asking Deeper Questions - The Federalist - March 20th, 2024 [March 20th, 2024]
- Olivia Rodrigo Hands Out Free Morning-After Pills To Teen Fans - The Federalist - March 20th, 2024 [March 20th, 2024]
- Poll Shows Biden Bombed State Of The Union Address - The Federalist - March 20th, 2024 [March 20th, 2024]
- GA Election Board Member Voted On Cases Involving His Clients - The Federalist - March 20th, 2024 [March 20th, 2024]
- GOPers Pass Bill To Keep OK Free Of Ranked-Choice Voting Chaos - The Federalist - March 20th, 2024 [March 20th, 2024]
- CISA Admitted 'Risks' Of Vote-By-Mail In Internal Docs From 2020 - The Federalist - January 23rd, 2024 [January 23rd, 2024]
- Democrat Bill Aims To Stifle Regulation Of Big Fertility Market - The Federalist - January 23rd, 2024 [January 23rd, 2024]
- Group Behind 'Zuckbucks' Is Now Meddling In The 2024 Election - The Federalist - January 23rd, 2024 [January 23rd, 2024]
- California Democrats Work To Make Discrimination Legal (Again) - The Federalist - January 23rd, 2024 [January 23rd, 2024]
- A Haley Win In New Hampshire Will Not Be The Victory She Thinks - The Federalist - January 23rd, 2024 [January 23rd, 2024]
- Votes Without Citizenship Proof 'Exploded' In AZ After Dem Lawfare - The Federalist - January 23rd, 2024 [January 23rd, 2024]
- Congressional Republicans Need To Start Fighting Abortion - The Federalist - January 23rd, 2024 [January 23rd, 2024]
- Matthew Malec, Author at The Federalist - The Federalist - January 23rd, 2024 [January 23rd, 2024]
- Larry Taunton, Author at The Federalist - The Federalist - January 23rd, 2024 [January 23rd, 2024]
- Congress's $1.7 Trillion Spending Bill Goes On Trial In Texas - The Federalist - January 23rd, 2024 [January 23rd, 2024]
- Chicago Abortionists Advertise Possibly Illegal Late-Term Abortions - The Federalist - January 23rd, 2024 [January 23rd, 2024]
- How DeSantis's Disappointed Supporters Can Move On From Ron - The Federalist - January 23rd, 2024 [January 23rd, 2024]
- Thousands Attend March For Life Hoping To Make Abortion 'Unthinkable' - The Federalist - January 23rd, 2024 [January 23rd, 2024]
- Putting An End To Race-Based Hiring Is 30 Years Past Due - The Federalist - January 23rd, 2024 [January 23rd, 2024]
- Ever-Closer Union: Brussels Plots Federalist Reforms The European Conservative - The European Conservative - January 23rd, 2024 [January 23rd, 2024]
- 4 Years Too Late, DOJ Admits Biden 'Laptop From Hell' Is Real - The Federalist - January 23rd, 2024 [January 23rd, 2024]
- Heritage Foundation President Slams Davos Elites To Their Faces - The Federalist - January 23rd, 2024 [January 23rd, 2024]
- TSA Sign Says Migrants Without ID May Opt Out Of Photos - The Federalist - January 23rd, 2024 [January 23rd, 2024]
- Two-Thirds Of Elites Say There's Too Much Freedom In America - The Federalist - January 23rd, 2024 [January 23rd, 2024]
- How Disgruntled Fishermen Could Prompt SCOTUS To Capsize The Administrative State - The Federalist - January 23rd, 2024 [January 23rd, 2024]
- No Testing Needed To Prove Hailey Davidson Isn't A Woman - The Federalist - January 23rd, 2024 [January 23rd, 2024]
- Democrats Promise To Save 'Democracy' By Destroying It - The Federalist - January 23rd, 2024 [January 23rd, 2024]
- 7 Takeaways From SCOTUS Case That Could Slay The Bureaucracy - The Federalist - January 23rd, 2024 [January 23rd, 2024]
- Haley Woos Her Real Constituents In New Hampshire: Democrats - The Federalist - January 23rd, 2024 [January 23rd, 2024]
- Men, Ignore The Bad Advice To Seek A 'Low-IQ' Wife - The Federalist - January 23rd, 2024 [January 23rd, 2024]
- By 'Protecting Election Workers,' Democrats Mean Protecting Control Over Election Administration - The Federalist - January 23rd, 2024 [January 23rd, 2024]
- Harbaugh Champions Right To Life After Football Championship - The Federalist - January 23rd, 2024 [January 23rd, 2024]
- Oppressor Matrix Gives Leftists Like Hasan Piker Brain Worms - The Federalist - January 23rd, 2024 [January 23rd, 2024]
- How And Why The Ivy League Will Die - The Federalist - January 23rd, 2024 [January 23rd, 2024]
- Gorsuch Gleefully Leads Right-Wing Cohort In Fulfilling Their Federalist Society Quest - TPM - January 23rd, 2024 [January 23rd, 2024]
- Only 6% Of Americans Approve Of GOP Leader Mitch McConnell - The Federalist - December 19th, 2023 [December 19th, 2023]
- Knowing Of Hunter's Plan To Defy Subpoena Puts Biden In Legal Jeopardy - The Federalist - December 19th, 2023 [December 19th, 2023]
- PA School Board President Sworn In With Pornographic Books - The Federalist - December 19th, 2023 [December 19th, 2023]
- The 'Ukraine War Is Good For Business' Argument Is Vile And Also A Lie - The Federalist - December 19th, 2023 [December 19th, 2023]
- Data: Banning Therapy For LGBT People Increases Suicide Risks - The Federalist - December 19th, 2023 [December 19th, 2023]
- John Yoo and Jeremy Rabkin, Author at The Federalist - The Federalist - December 19th, 2023 [December 19th, 2023]
- From Woke Walkouts To 'Equity,' Illinois Schools Are Melting Down - The Federalist - December 19th, 2023 [December 19th, 2023]
- Hunter Biden Invokes Gun Rights Ruling That Joe Called Unconstitutional - The Federalist - December 19th, 2023 [December 19th, 2023]
- China's Cyber Warfare Surges With Hacking Of U.S. Infrastructure - The Federalist - December 19th, 2023 [December 19th, 2023]
- Every Biden 2024 Scenario Is Deadly Dangerous - The Federalist - December 19th, 2023 [December 19th, 2023]
- Study Finds NewsGuard Overtly Biased Against Conservatives - The Federalist - December 19th, 2023 [December 19th, 2023]
- Republicans Need To Learn How To Go After The Left - The Federalist - December 19th, 2023 [December 19th, 2023]
- Biden Overdrew America's Account With Blank Checks To Ukraine - The Federalist - December 19th, 2023 [December 19th, 2023]
- Meet Michael Dreeben, The Man Behind Major Anti-Trump Ops - The Federalist - December 19th, 2023 [December 19th, 2023]
- Senate Dems Block Bill To Allow Whole Milk In School Lunch Programs - The Federalist - December 19th, 2023 [December 19th, 2023]
- 'Experts' Who Discredited Biden Laptop Call To Extend Warrantless Spying - The Federalist - December 19th, 2023 [December 19th, 2023]
- Ranked-Choice Voting Proponents Are Lying To WI Voters To Hide The System's Flaws - The Federalist - December 19th, 2023 [December 19th, 2023]
- The Case for an AUMF Against Iran and Its Proxies - The Federalist Society - November 18th, 2023 [November 18th, 2023]
- Bari Weiss's Olson Lecture: You Are the Last Line of Defense - Reason - November 18th, 2023 [November 18th, 2023]
- Book Review: The People's Justice - The Federalist Society - November 18th, 2023 [November 18th, 2023]
- Farewell to the Mayflower - Reason - November 18th, 2023 [November 18th, 2023]
- FBI Targets Trump Voters Ahead Of 2024 Election - The Federalist - October 9th, 2023 [October 9th, 2023]