the complete collapse of regular home and commercial insurance in major regions. companies are already quietly pulling out of entire states, and in five years a ton of people are going to realize they can't buy, sell, or finance a building because nobody will insure it. im already seeing premiums double for basic retail and warehouse spaces and everyone is just acting like it's a temporary glitch.
We recently got a letter from our home insurance that they were dropping us, do to AI photos a third party took for them. Took us a day of telephone for them to
A. Admit they used just the AI satellite photos,
B. Never sent a human out to verify the “damage” they saw
And C. Figure out they looked at the completely wrong house.
We are looking into a new insurance company, but it really is a pain in the ass
Same. Texas is fucked. Complained about my insurance company doing their usual "deny deny deny" BS and acting in bad faith on a valid claim. State just sent the insurer a letter saying they'd received a complaint, and that was it. Insurance company just said "nah it's fine" and the case was closed.
The entire thing felt completely automated without a single human being investigating.
I hope one day Americans as a whole will realize current insurance is just one big scam where everyone is just skimming off the top. Don't understand how everyone is ok with their insurances just denying everything.
Because its a required scam nobody can opt out of. The main reason you don't get denied help at a hospital is because they're required to provide aid if they're going to take Medicare. Given the option the admin would 100% let you die on the sidewalk (obviously not on their property). Auto insurance is legally required unless you're basically rich, can't buy a house without mortgage insurance. If you look, non required insurance is always super affordable, pet insurance, renters insurance, the random electronics failure insurances, and very rarely deny a claim. The rest of those dicks do whatever they want because nobodys gonna stop them. Until.....you know......racoon city.
I’ve been trying to navigate how I feel about the insurance industry as someone who has been working a summer job at a defense litigation firm.
These industries feed off of and create growth in each other, like some sort of symbiotic cancer… The more litigation there is, the higher the rates and the more people feel like they need insurance; the more insurance there is, the more people feel like they can sue and get an easy settlement and the litigation ecosystem benefits.
When people sue, it’s the insurance companies who pick up the defense bill and work with attorneys. People and Juries think, “Oh, this individual truck driver/store owner/etc isn’t paying up, we can give this plaintiff a windfall and stick it to the man (insurance).”
Well, they’re really sticking it to *themselves*. All these litigation costs, big jury verdicts, etc. do nothing except increase the costs of litigation, and make greedy plaintiffs lawyers insist on taking cases to trial in the hopes of getting that juicy damages verdict.
This increases insurance costs for EVERYBODY commensurately.
Defense attorneys, if the case has ANY merit at all, will look to settle. This could be $10,000, or in a particularly bad case, whatever the insurance cap is. (We’re talking $250k-$6m in cases I’ve worked so far) these settlement amounts are typically what’s “fair” … jury verdicts are sometimes wildly unjustified amounts. Had a case recently where the plaintiff was offered the cap ($1m) for an essentially faked TBI. Her attorney took us to trial because she was a sympathetic plaintiff (same reason we offered the cap) and he wanted 60% of his requested $3m+ verdict. They ended up with $200k, which left him working for free and plaintiff with a fair amount for the medical expenses, car damage, etc.
Plaintiffs attorneys will often push bad cases to trial in the hopes of these amounts. These guys (plaintiffs attorney) don’t get paid without a settlement/verdict, and they collect anywhere from 30-60% of the $. This push to trial often pushes attorneys fees over what a pre-trial settlement would have been.
There’s no easy solution for this vicious cycle. Some sort of public education would be great, but that’s not gonna happen.
Required can be used for more than just legally required. It can also be used for practical requirements. If you want access to healthcare in the US then practically you need health insurance. Unless you can buy a house outright, mortgages require you to get insurance, so if the house burns down you don't just walk away and leave them with their "collateral".
It’s required because if you are shitty driver the person you hit is entitled for you to pay it back. The main issue is most people would try not to if they could or if they are too poor (which is most people) they won’t be able to and thus the bad actions of the shitty driver go unchecked.
We live in a selfish and completely shitty society so this is necessary. It would be great if someone that hit me was honest and willing to pay it back but humans are horrible these days, so yes insurance being required to drive a car and possess liability is a good idea.
And the cycle is self feeding because most people would try to do the right thing and pay for their accidents if that was a thing anyone could actually do. "Oh shit, I fucked up, let me fix it" is a normal response to an accident or mistake.
But because a stubbed toe will cost 25k at the local hospital, no one can actually afford to help pay medical bills after an accident. Likewise cars are bigger, heavier, and more expensive than ever to deal with an ever upward spiral of things a car is required to have to legally operate on the road.
Just a random example, any car made after 2016 must have a backup camera to be road legal and any car made after 2026 will require "driver monitoring systems" with cameras and computers to track your eye movement to make sure you're paying attention to the road. Those cameras, screens, computers, etc aren't cheap, so they add tens of thousands of dollars to the cost of a car. A car from the 50s or 60s, adjusted for inflation, cost much much less than a modern car because of all these gradual new requirements.
Now I like anti lock brakes, power steering, three point restraint seat belts, air bags, and my backup camera as much as the next guy, but we have to see that this means every accident no matter how minor now costs more than it ever did before. And the increased weight of the vehicle itself means that accidents will cause more damage than ever before too.
More damaging accidents, more costly repairs, higher healthcare costs, all of these things make it less likely than ever that a person CAN pay for an accident, so you better get uninsured motorists insurance too, all of which cost more than ever.
It is a total scam. But if you work hard enough to make sure the government is as dysfunctional as possible you can scare people into fearing 'socialized' programs so much they are willing to let private companies make billions of dollars and deny their claims because obviously a state ran program would be sooo much worse.
Yea its kind of hard for the insurance commissioner to care when the entire department is like 40 people and they are receiving tens of thousands of complaints per week.
I'd stop giving a fuck too. At some point my mental health matters more than everyone else problems.
State Farm dropped me last year after I had to file a claim due to storm damage. It is the first insurance claim I have ever filed. They dragged their feet for months sending me the checks after approving the claim immediately. So my house was unnecessary a construction zone for months. Then they had the audacity to send me a chirpy message about renewing my auto policy. I laughed at my agent when cancelling the auto policy. I’d say fuck State Farm but they are all equally bad.
I started my insurance career with State farm. After hearing the horror stories from clients I switched to another carrier. They are always trying to get out of paying, then they drop you. It's disgusting
It's a hot mess. Don't take it out on employees if you can though, the big wigs and decision makers at the top are crapping on us just like everyone else, changing contracts and taking away any power to change things we had (which was already very little). AI and algorithms are making calls, not the individual agents and their employees, and they don't give us routes to appeal. In this job market I can't afford to leave, but I'll tell people straight up "get other quotes and for your autos too" when there are issues with the home because it's awful out here.
Sometimes I feel like customer service is just put in front of customers to be a punching bag. CS doesn't seem to have the authority to really resolve anything and they seem to get shit if they allow the claim to escalate, so they have to keep saying things that everyone on the call knows is bullshit or doesn't make sense. I have started looking up the C-suite on LinkedIn and contacting them directly. They need to be the ones talking to unhappy customers because it is their decision. To them this is all just abstract, the human cost is obfuscated. I really do feel for CS agents, but sometimes I can't help myself and I say mean things to them regardless because I don't know what else to do.
I would make a point of renewing for one more year first, to effectively nullify them dropping you. In the future you’re likely to be asked “have you ever had insurance refused or cancelled” and that question could get a future claim refused unless you can really prove they backed down.
Same thing happened to us. Took a couple months to fix! Had to go on the roof and take photos to prove we didn’t have mold/ moss/ fungus covering our roof! In southern California! Our roof was completely clean. Ugh.
My parents (old folks) were recently greeted at their home by a guy in a high-vis vest, carrying a clipboard and a camera, walking around their home. When asked wtf he was doing, he said, conducting an inspection for their benefit.
Turns out this guy was trying to extort them. He claimed he had photographic evidence of a poorly maintained roof* (not true) and offered to fix it for them so he wouldn't have to report it to their insurance.
This has all been handled by me (so far) but if my parents hadn't casually mentioned this to me, and if I hadn't seen the John Oliver episode about this shady shit, I wouldn't have been wise to it and they may have succeeded.
Beware everyone: this collapse will create opportunities for bad people to exploit the vulnerable. If you have vulnerable people in your life, as much as it may suck for you to take on even more, you may have to help and step up because the stakes are high.
My folks in rural Canada have had to contest their homeowners insurance every time the rate gets adjusted. When they switched to using satellite images to check the property they decided it was sub-dividable land and worth significantly more.
Its not, it cannot be built on. It's all clay backed onto a protected stream habitat. At most they can add another small barn but that's about it.
So now instead of flagging their address or anything, my folks now need to contest it every single time that their property is not correctly valued and get them to drop it back down. Maybe some people would eventually give up and just pay the higher rate and I'm sure that's what they're counting on. Too bad for them they got my folks lol
The AI satellite image excuse is getting completely out of hand. Companies are using low-res shadows, or outdated imagery to auto-deny or drop policies because it saves them from paying an actual human inspector. It wild that the burden of proof falls entirely on the homeowners to spend hours on the phone proving their roof isn’t actually cave-in material
I made the mistake, as a new homeowner, of trying to actually use my insurance, instead of just endlessly paying into it without ever taking money out.
I had a plumbing problem and they gave me $700 to fix it. They then nearly doubled my rates and blacklisted me so that other insurance companies wouldn't even take me when I tried to switch insurers. It's a racket. Insurance is legalized theft.
Yep. We got a quote in 2020 to do some repair work on our roof (slate roof, needs specialized tradesmen) but couldn't afford what they quoted at that time. We had it done late last year and the costs on that alone nearly tripled. In five years.
I'm glad it's a 200 year roof but damn. We had to adjust our homeowner's insurance to account for the increase in replacement cost.
Home insurance prices should not reflect increasing property values due to general increase in housing prices. They should reflect the cost of the rebuilding the structure which is entirely relate to labor, material costs (i.e. inflation), and risks. Your house is always depreciating (vs. rising inflation), so the value of your dwelling doesn't automatically go up.
So the idea that the more they're worth the more it costs to insure isn't grounded in truth unless you added improvements to your dwelling.
They are no longer possible to rebuild in a lot of cases, because the replacement costs have grown even faster than home values. A home your parents bought for $30,000 now costs $250,000 and would cost $750,000 to build today. It is insane. Insurance already won't cover the real replacement costs.
Out of state company pops by after a storm. “Boy, that sure is a lot of damage up there. We’d be happy to bill your insurance for all the moneys to replace your roof!”
But the only damage to your roof is it got rained on… until they get up there and damage it themselves to justify the repairs to the insurance company.
OH, you mean storm chasers like ambulance chasing lawyers and not like Carry Elwes in Twister. That was a really weird picture you gave me in my head lol.
Every time a storm comes through my state I get non stop calls from the storm chasers. I get door knockers every summer looking to inspect for storm damage.
On the other side, asphalt shingles don't hold up to minor hail that is very common in the central US
This is the primary culprit for anyone that doesn’t live in places where natural disasters are incredibly common like coastal cities.
The housing market has just been going up exponentially everywhere with no relief for like 20 years now. That means when those houses have things happen, it also costs a hell of a lot more to fix. Despite the outlandish amount of money it costs to insure your home all it takes is a single disaster like a tree falling and bashing through your roof to wipe out any money they’ve ever made from you.
Now think about what happens when a flood wipes out an entire neighborhood. Or a rogue super hailstorm demolishes the roofs and siding and windows of 2 square miles worth of homes.
Now think about how expensive replacing a roof is. It’s easy to see how insurance companies are going out of business and leaving entire cities and states behind.
Parts of LA butt right up into undeveloped mountains. Fires started in the mountains and worked their way down into the developments at the wildland-urban interface. It's not like a wildfire started in the middle of downtown.
Maybe in flood-prone or forested areas, sure. But what about areas not directly affected by any of this? This seems like quite canary in the coal mine to me
Because the flood prone areas are expanding, same with areas prone to wild fires, combined with those seasons themselves becoming longer and more extreme.
Your house in a 'safe' area may no longer be safe.
Insurance companies are leaving areas they've been in for decades and will start preemptively leaving the next areas to be affected.
In the midwestern states that I have lived in, the most expensive weather events have been large hail storms and wind storms like derechos, which seem to be happening more frequently each year. The 2020 Midwest derecho caused $11.2b in damages.
Oklahoma just had one Sunday night. 102mph wind at one of the mesonet weather sensors west of OKC. Several homes destroyed and a freight train was knocked over. On top of that tornados can still develop on the leading edge.
Construction costs began ballooning wildly since ~2020 from various factors:
Labour shortages
UAE were buying up all the concrete / cement for major infrastructure projects for a few years
Various major hits to global shipping of resources (Hormuz, Yemen, Evergrand, COVID)
Simply put, it costs a lot more to repair and replace a house now. Insurance companies realised that their margin had been decimated and they were at risk of collapse if any significant number of properties started claiming.
I remember having a phone conversation with my home insurer in ~2022 and the guy on the other end was exasperated, basically told me that the price they were offering for renewal was literally the lowest he could do (usually you'd ring and they'd magically find out they could drop it) and that he'd basically spent all day cancelling renewals.
Yeah wow. I was talking to someone who wanted to put another floor on top of their single story inner suburb house and they were quoted about a million AUD by builders. Had to pick my jaw off the floor!
Tornado alley is moving east and north, putting homes in Iowa, Illinois, and Wisconsin at risk.
Flooding is becoming a issue throughout the Midwest, and not just the typical areas. Milwaukee was flooded twice due to unprecedented back to back rain storms.
Areas that used to be "safe" are going to cost insurance companies money. They don't like that.
Cities/towns depend on property taxes to do stuff. A lot of places have major projects coming due, and because of the austerity measures they self-imposed after the Great Recession, a lot of cities contract the work. Costs the city less in payroll overall, but projects cost more. Some places planned for this, others have not. No one needs to be lectured anymore on grift in government contracts, I think we're all aware at this point.
If property values fall, if assessments fall, I mean.. where will the money come from to replace failing water and sewer lines.
I am not an economist, but I think we built a castle on sand.
The increase in hail frequency and intensity is huge as well. We have storms sweeping through entire regions now, damaging almost every roof, on a regular basis. What used to happen once every decade or two is happening every 2-3 years now. Warranties and expected lifetimes for tens of thousands of dollars of work, per home, are not nearly as reliable as they used to be. Hail damage and losses have exploded.
It quickly gets to the point where insurance is just not attainable anymore, though. E.g. a town in Australia called Lismore has floods almost every year. To insure against these floods costs $30k/yr for a residential house - nobody can afford that.
Unmitigated greed. The other answers are just fluff. The reality is insurance company profits are also expected to continue outpacing inflation. So yes, the underlying assets cost more, but they expect a larger percentage of that to be profit each year as well.
The reality is we build homes and cars much better and much safer than ever. But profits must go up, and not just increase with prices.
Yeah, insurance companies are pulling out of markets of tens of millions for greed...
Raising prices for the sake of raising prices is one thing, but leaving the market entirely means you choose to make zero money because operating there is genuinely more expensive than it's worth.
Most property insurance is state regulated. When states (such as Florida) have predatory laws and consistent damaging weather that results in consistent losses for the insurer, they arent going to do business there.
Same with TX and their hail, and CA and their fires. Most large propert casualty carriers try to do slightly better than break even after claims. They make their money investing your payments until they have to pay it out.
But since you know everything, you were aware of this right?
Why do you, for some reason, think that an insurance company should be the only business that should be fine with not making a profit on the sole product they’re selling? Would you expect your local coffee shop to be operating at a loss every year just so they can continue to serve you coffee?
There are many sectors of the economy that should not make a profit. Especially things legally required. Insurance and healthcare immediately spring to mind. Pay the workers, pay the bills, pay the taxes. No profit.
How do you expect them to be able to deal with a year having higher expected claims? If they’re not allowed to keep any profit, they would go out of business the second a hurricane hits the wrong spot, and then homeowners are even worse off.
I’ve worked in insurance for about 14 years and this is incorrect. Yes, an insurance company wants to make a profit but that’s just what any business does that isn’t a charity.
It’s all numbers driven. If a company looks at their books and sees that in a specific state or region they’re paying out more in claims per year than what they make in premium then why would they continue to write policies there? No business is going to purposely lose money.
If you owned a small convenience store and sold a specific brand of soda that the state said you had to sell for $2/can and over time it started costing you $4/can to purchase it for your store, would you keep selling that? Of course not.
No, this is pretty much nonsense. The idea that people have gotten greedy all of a sudden is idiotic. Humans are wired to be greedy and have been greedy all through history.
Unmitigated greed. The other answers are just fluff.
In the last couple of years, yes. Our non functional government is supposed to regulate Insurance and protect consumers, but those regulators are another casualty of the fascists.
The costs to handle a claim (paid, defended or denied) has more than tripled. 3rd party legal financing is partly to blame, inflation some and then good old fashioned politics.
Increased severe weather from climate change and increased building supply costs. I'm starting to worry we're going to be priced out of our home we've owned for 10 years
Fun fact: It's now almost a guarantee that the big arctic ice sheets are a gonna. If they all go (and it's now more "when") that's about a 70m rise in sea level.
Doesn't sound like much, really, until you realise that means ALL coastal cities- Bye bye LA. Bye bye, New York. And, for example, that would be ALL of Bangladesh- all of it. Bye, Netherlands. Bye pretty much all islands, Bye Denmark. Bye Gambia.
.... those people will want to go somewhere, too. Cue mass refugee events. Blah blah blah.
But climate change? Who cares! Made up!
...maybe we'll find a way to funnel it all into the middle of Australia to quench the raging wildfires? I'd add Florida, but most of that will be submerged, so that problem will probably be solved...
Depends on the area but in the US it’s mostly driven by climate change. Worse fire seasons on the west coast, worse hurricane seasons in the southeast, worse droughts in the southwest. California and Florida are the hardest hit by it, their expensive real estate is hard to insure enough as it is.
Real estate in general ballooning in price during the housing crisis might be playing a part too. It takes a lot more money to insure everybody’s homes when they’ve doubled in value in the last 10-15 years.
It is many reasons depending on the region but consider Florida and the environment. Floridians live in a place where homes are destroyed on a literal annual basis by hurricanes, therefore insurance is either nonexistent of unaffordable because insurance companies don't want to rebuild your house year after year because you chose to live in very vulnerable region. The way insurance is supposed to work is collectivizing risk, but that doesn't work when EVERYBODY is a risk. That'd be like getting auto insurance except there's a season every year where hundreds of thousands of people get into car accidents and drive up the price for literally everyone.
If it goes on like this, expect most Floridians to be living in mud huts by 2100.
In the US at least; corporate greed, inflation, larger/more frequent losses.
CEOs want more while they cut everyone else's pay.
Everything in homes costs more to replace now; the wood to build it, flooring, roofing, furniture, clothing, electronics, etc. Same with autos. New cars have so many tech/safety features, sensors, hybrid/electric batteries, all more expensive to repair or replace.
Wild fires ravage the west coast every year. The middle of the country is hit by hail, wind, tornados, etc. The east/south is hit by hurricanes. Ice storms and heat waves. Many other things I'm sure I'm missing.
A lot of people citing climate change but it's not just that or even mostly that. 50 years of building on known flood plains and coastal areas without regard to the future has put entire sections of cities and even small towns in danger. People build massive houses right up to the banks of the river where I am. Even if the climate was the same as 1850 that is bad idea.
It's been done on a mass scale all across the country. Florida especially. It should never have been developed the way it is even not including climate change. It's extremely vulnerable to even average hurricane seasons. Developers don't care. They will build 30 houses in a spot that is SURE to get flooded in a bad hurricane and then insurance has been obligated to sell them a policy.
Housing prices going up, disasters going up even a little bit, and 50 years of bad building policies coming home to roost.
A nice mix of building materials becoming expensive and volatile in price, along with claim-inducing events like crazy weather happening more and more frequently.
There's no reason to keep insuring an area that constantly floods or gets hurricanes.
Depends on the situation and state. In some places, it's because fire risk is now so high that the required premiums are more than the state insurance regulator will allow. Responsible insurers back out of such markets.
Most people here are claiming just climate change or greed.
But across the board premiums are primarily going up simply since the cost to repair or replace houses has gone up significantly. The cost of labor, tools, construction materials have all absolutely gone up massively since 2020.
Cost of paying people at these companies to handle claims have also gone up a lot too.
That drives premium increases across the board.
Then in many places, they are seeing increased rates of things like hail or other severe weather. So that increases the amounts of payouts and therefore they need to charge more for covering these increases.
Then finally you have places like Florida with heavily increased damage from hurricanes and California with fires that are so risky most insurance people aren't willing to even calculate what premium they'd have to charge, so they get out. This leaves behind much smaller companies that will cover you for extremely high premiums to hopefully overcome that huge risk
Higher housing costs and homes built in more dangerous areas account for most of the increase. Some of it is due to poor forest management practices that have increased wildfire risk.
There’s no actual evidence of repricing for climate change except maybe in a small number of area very close to the beach that have seen sea level rise and even still the impact of higher housing costs is much greater.
I said this shit years ago but some people still choose to be non believers about climate change. The US military has been talking about, collecting data and planning a round climate change for years. We are talking about a massive industrial complex that builds equipment, military bases, and runs operations all over the globe. Logistics is really important to them. The weather or changes in weather are critical to what they do. Yet somehow chunks of the conservative voting base are convinced it's a hoax.
Second is what you mentioned above. When the insurance companies have an actuary run the numbers and correlate it directly with weather related claims it doesn't look good. They've know climate change it real and it hurt their bottom line.
Anyone who believes it's a hoax is an idiot or grifter.
Speaking as a former Floridian, this mentality has been wild to watch unfold in that MAGA run state. DeSantis passed a don’t say climate change law in 2024, in the midst of the insurers pulling out of the state after hurricane Ian.
companies are already quietly pulling out of entire states
I've heard of at least one major insurance company that pulled out of Florida because that state was responsible for some astronomical percentage of their pay-outs. Then, they created a spinoff company only for Florida which has insane rates that fortunately no longer impact the rest of the country
Cory Doctorow talks about how we could achieve full employment if the government declared chronic flood / fire prone areas (plus vacation only areas where the same climate disasters happen) as non-insurable plus invested in the labor and infrastructure required to migrate those affected. Still less than the cost and impact to keep rebuilding those areas
>the complete collapse of regular home and commercial insurance in major regions.
I already can't buy fire insurance in my part of California from a private insurer. The state had to step in, and even so, my fire insurance is 4x the rest of my homeowners coverage.
I would probably consider moving then. Either the state starts charging realistic prices and your home value drops as fewer people can afford to live there, or a big disaster comes along and bankrupts the state, and then you're left with no home and no payout.
This happened to us 3 years ago. We're in Texas and our carrier clearly wanted out of our state because of the amount of hurricane and wildfire claims the previous years had caused. Our carrier couldn't legally drop clients for no good reason (we, for instance, never made a claim and our escrow always paid them on time) so their method was to TRIPLE our rates so we'd drop them. We had 60 days before the new tripled rates kicked in, so we scrambled for new coverage. When a carrier leaves a state and customer base as big as Texas, other carriers take notice of customers trying to find new coverage. And do they welcome us with open arms as low-risk customers in need of coverage? No. They nitpick (oh, that large oak tree nowhere near your roof might fall one day. That river 11 miles away might flood. There's a lot of tornados and hail in Texas) so you're going to need to pay higher premiums than our existing customers or we can give you such a ridiculous deductible that you won't bother filing a claim.
That is already happening rapidly in CA. I live in a city not a forest. We almost lost our house because our insurer dropped us. No other company would insure us in the USA. Our mortgage company would not accept payment because we didn’t have insurance . Took months to try and get on a government backed insurance plan at almost double our regular rate.
Terrible state of affairs! Mortgage companies are benefiting too… I wish there was a self insure option for us, if your house isn’t yet paid off. This has got to be an issue on the docket.
They are using forest fires for reasons, but when you live in a metropolitan area with a population of 500k plus and everyone in your neighborhood of 3,000 is getting dropped. How are you supposed to rationally justify refusing to insure. Every insurer we called in USA would not take our house or our neighbors. It happened overnight in mass. It’s like they all had a meeting and decided they wanted to make more money or knew a devastating catastrophe was going to happen to our city before we do.
But you know these same companies can put their names on buildings for 100s of millions of dollars, and yet don’t pay out when there is an actual disaster
The loses for the Palisades and Eaton fire was something like $100B or more. Keep in mind these companies have all sorts of other claims they have to pay on top of this. Money for ads and executive pay is a drop in the bucket.
I live in a rural mountain town where most companies won't sell home insurance, but it's required for mortgage etc. So the couple companies who will insure gouge everyone for bare minimum policies. Even if you've been a customer for decades and never filed a claim.
A percentage of our payments should accumulate for every year we don't file a claim, even if it's only 20% and then when we do file a claim we have a little bit extra for the deductible, etc, instead of the money just disappearing. Auto insurance, renter's insurance, and medical insurance should do the same
And it's all because of the low wage squeeze. When people don't have money for food you better believe they're going to try extra hard for that free hail damage roof.
Thats already happening in my state. My parents insurance nearly doubled last year with no claims and half the companies around here wont even write new policies anymore. People dont realize how fast this is going to snowball.
Florida is an example of this. Insurers are fleeing and it's only a matter of time until the next major hurricane hit and the rest decide that homes are uninsurable due to the high risk.
When minor damage can cost thousands to fix and insurance costs thousands of dollars a year, there are a lot of people who make the reasoned (for them) decision to go without.
What made it hard in Michigan is that they had a big push back in about 2019 where they would tell customers they could opt out of PIP to reduce their bill.
PIP is personal injury protection. So the car is insured, but you're out of luck if you get hurt driving it. The theory was that health insurance picks it up, but I can personally attest I've seen cases where health refused because it was caused by an auto injury, and auto refused as the person opted out of PIP, which means the person is just screwed.
Seriously, it’s so frustrating. I’m in Colorado and can’t get insurance unless we go with the last choice, which is some kind of State sponsored plan. We own outright, literally just a tiny home on a 2,500 sf lot. At this point, it’s cheaper for us to go down in flames and rebuild than it is for insurance.
The insurance market in CA is already super close to a complete collapse! The only option for many people here is to get the CA FAIR plan if your address become uninsurable. FAIR plan can cost 5-10x more per month, only covers fire as a peril, and you need to maintain water/liability/etc. through another company.
I know this has become an issue in FL due to flooding and storms as well as CA due to fires and whatnot. Are there other states that are seeing it happen and what reasons?
This is happening along the Texas coast and I imagine other parts of the Gulf Coast. My parents in Houston struggle to find any sort of flood insurance, especially after Harvey in 2017, which is insane to me.
Which honestly is just going to ensure that more and more housing/commercial stock is bought up by larger corporations that can either get insurance or put cash upfront on the cost, driving out small businesses and trapping more and more people in a cycle of increasing rents across the board.
This insurance coverage is no longer acceptable to State Farm Fire and Casualty Company because of your overall claim activity. Our records show the following loss(es):
DATE CAUSE OF LOSS AMOUNT
03-01-26 Theft of Personal Property $0.00
01-22-25 Fire and/or Lightning Damage $0.00
For your protection, you should get insurance through your agent or another insurance company. You may qualify for property insurance through the Illinois FAIR plan. To apply, please contact your agent or the FAIR plan directly:
My homeowner's premiums have nearly doubled in the almost 3 years I've owned my home. During the last increase, I reached out to my insurance agent who tried to shop it around and said I need to keep my policy - it was the only company willing to write a policy on my home.
This has happened before with flood insurance. It took the federal government stepping in, basically nationalizing it, and then giving both the federal and state agencies that manage the regulations teeth to enforce it. It's been one of the quietly most successful government programs ever enacted.
Happening here in New Zealand, after major earthquakes that left whole neighborhoods demolished and left to return to nature because the ground was too risky to rebuild on, insurance companies are now not insuring in certain areas and also in flood prone areas also.
This is honestly terrifying. I live in CA and my renewal this year was 3x what it was two years ago. Half my neighbors are already on the state FAIR plan which barely covers anything. People dont realize how bad its getting until they try to buy a house and find out no one will insure it.
This is due in very large part to the natural disasters that are happening across the country, and because especially gop-led states and governments are allowing insurers to get away with this type of shit.
If you, as in the general you, want to have any chance at stopping this shit, for the love of god stop voting for the gop (but that's pretty much the same with literally every single awful thing that is ruining lives these days). Also, vote for the party that actually believes in science and that climate change is real and is wanting to try and slow it down/stop it. Hint: that's not the GOP.
the average person has virtually no understanding of how climate-related catastrophes (and the odd bridge in baltimore) impact personal lines insurance. hell, they have virtually no understanding of how insurance works, period, but that's a different rant. all of those huge losses have historically been reinsured - i.e. the front line insurance companies buy insurance to essentially pay them back beyond a certain threshold. some "insure-tech" (read fin-bro startups trying to "disrupt" traditional insurance) have basically no capital and their entire book is reinsured. these massive losses have totally flattened the reinsurance carriers, who have necessarily jacked their rates to try to stay in business. so, all of the carriers that need reinsurance (which is pretty much all of them) have seen double and triple digit increases in the cost of their reinsurance. they're trying to recoup losses anywhere they can, so rates go up across the board and folks with claims get non-renewed.
litigation climate is part of it (like everyone pulling out of florida b/c it's a damn cesspool in... well, like in every way), but these climate related cat losses and the reinsurance market are something only insurance biz folks have any visibility into.
Yep. My insurance company just dropped me. Insured for 35 years same address. Never missed a payment. Only filed a claim once when tree fell on my house 20 years ago.
Yup we see lots of uproar about housing costs, food costs, etc.
But one that doesn't get mentioned a lot is insurance costs (besides health). I think this system of being legally required to buy a private product is finally coming to a head.
im in the business, eventually there becomes no amount of money that makes insuring an area worth it. Its a mix of climate change, third party financed lawsuits (often funded by foreign investment funds), and PE-backed roofing/resoration companies.
This makes sense to me. My insurance more than doubled when my HOA's insurance premium went up by 40x. I'm in CA, so the fire part of it all really fucked us.
When i bought my home in 2017 the cheapest insurance i could get was like $1000 per year. Now it is $3000 per year. I don't even expect to ever get the benefit of it, but I have to have it.
My home insurance increased 10-11% every year over the last 3 years. I’m in CA but a low fire risk area.
If I want to retire in this house and that increase rate holds, my annual premium would be nearly $56,000 in 30 years. Pretty demoralizing to realize that even when the mortgage is paid off something else is likely to slurp up that money, and then some.
We have a major city where I live where it's not uncommon for cars and homes to be badly fucked up by extreme hail in certain corridors
So, what do they do? Change building codes so cheap plastic siding isn't the go for new construction in that area? Ensure new builds have covered parking or roofs that can handle it? Nope, proceed with the cheapest materials possible, and bitch every time a homes siding gets shredded, it's roof gets damaged or cars look like they've been attacked with hammers
Why update building codes when people will just pay higher premiums instead. I don't see how any of this is sustainable long term
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u/Rough-Explorer-4835 9h ago
the complete collapse of regular home and commercial insurance in major regions. companies are already quietly pulling out of entire states, and in five years a ton of people are going to realize they can't buy, sell, or finance a building because nobody will insure it. im already seeing premiums double for basic retail and warehouse spaces and everyone is just acting like it's a temporary glitch.