State Farm, pleads with department of insurance for Calif rate hike

Sandkist said:
I guess that depends on your definition of “minimum profits”.😀 4.2 billion net on 42 billion of sales plus 16 billion from asset investments. That was the last year of positive net income for State Farm. In 2023 they only earned 10 billion from their asset investments. At that level I am sure that is not considered a great year but a far cry from insolvency.
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10% profit margin isn't exactly raking it in...

AlpineFunco said:
Hammering them doesn't mean we think the state should do it. Having the government step in definitely is not the answer. These insurance companies have been gambling and winning for decades. They lost this year. Time to suck it up, pay, and move on. They don't have to have billions in profit EVERY year.
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Insurance companies aren't gambling. The second they feel like it's gambling, they back out. Risk aversion is their mindset through and through.
 
Rockwood said:
10% profit margin isn't exactly raking it in...
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Many companies ( other industries) would disagree with your statement. If insurance companies are as conservative as described than 10% is a nice conservative margin. State Farm, being a mutual company, would tend to be on the conservative side of things.
 
AlpineFunco said:
Isn't that just for California? Did State Farm form a spinoff company just for California business and that is what is suffering the huge loss, while the parent company is doing just fine?
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Parent company will be doing fine until the reinsurance claims hit then we all get to pay to cover those payouts, could drive rates up nationwide.
 
MWB said:
I heard that the Ca. State insurance caps out at 5 million dollars.
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I thought it was 3 M? I've been fortunate and haven't had an issue yet but my buddy did and I thought they capped him at 3M. His place is worth more but not by much so it hasn't become a major concern....yet.
 
Sandkist said:
Many companies ( other industries) would disagree with your statement. If insurance companies are as conservative as described than 10% is a nice conservative margin. State Farm, being a mutual company, would tend to be on the conservative side of things.
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Yeah, I'm not saying it's bad. I'm saying it's not amazing. If I'm operating at 10% profit, I'm behind the 8-ball.

Either way, I'm not sure where your 10% numbers came from.

www.insurancebusinessmag.com

State Farm reports monster loss for 2023

Policies up, record new policy volume
www.insurancebusinessmag.com www.insurancebusinessmag.com

This shows a massive insurance loss, with an overall net loss of $43M.
 
For context.

For my CA Peeps that would appreciate some factual information about the homeowners rate environment:
California insurance rates for Fire Insurance do not match the high risk that living in California brings.
The costliest states in the United States for losses are as follows:
1. Florida: due to hurricanes, flooding and high litigation
2. Louisiana: due to flooding, hurricanes and coastal erosion
3. California: due to wildfires, mudslides, earthquakes and high litigation
4. Texas: due to hurricanes, hailstorms, flooding and tornadoes
5. Oklahoma: due to tornadoes, hailstorms and fracking earthquakes
California is number three for the costliest states for insurance companies. We have historically had the lowest insurance rates.
The map below outlines average annual homeowner prices per state. Black is highest, followed by purple, pink, orange and finally yellow.
As you can see from the map, Florida and Oklahoma have the highest premium, they should due to the risks they have in the state. Louisiana and Texas pay double what Californians pay for insurance. California, which is the third riskiest state in the country has some of the lowest insurance premiums in the country.statefarm.jpg
 
MGMFRP said:
For context.

For my CA Peeps that would appreciate some factual information about the homeowners rate environment:
California insurance rates for Fire Insurance do not match the high risk that living in California brings.
The costliest states in the United States for losses are as follows:
1. Florida: due to hurricanes, flooding and high litigation
2. Louisiana: due to flooding, hurricanes and coastal erosion
3. California: due to wildfires, mudslides, earthquakes and high litigation
4. Texas: due to hurricanes, hailstorms, flooding and tornadoes
5. Oklahoma: due to tornadoes, hailstorms and fracking earthquakes
California is number three for the costliest states for insurance companies. We have historically had the lowest insurance rates.
The map below outlines average annual homeowner prices per state. Black is highest, followed by purple, pink, orange and finally yellow.
As you can see from the map, Florida and Oklahoma have the highest premium, they should due to the risks they have in the state. Louisiana and Texas pay double what Californians pay for insurance. California, which is the third riskiest state in the country has some of the lowest insurance premiums in the country.View attachment 137476
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Add in the construction costs and compliance in this state…
 
I have two house here in Ca. and one in Florida that's had 3 direct hits in the last 5 years, No damage,but the only way I can get hurricane insurance is through Fema. Houses in Ca. are way more expensive. I only keep liability insurance on the homes in Ca. We had one of the big fires in early 2000's. Looked like the moon when it was over. I stayed and saved everything. I didn't call the insurance company because I had no damage. About 3-4 days later when I was cleaning up some guy comes walking up my driveway saying he's from the insurance company. I told him I didn't need him. Said doesn't matter it a Federal disaster area and they have to visit all customers. Needles to say I received a pretty good check I didn't want and a month later insurance was canceled because they are leaving the state. Now I have 1500' of fire hose, a big pond for water two big pumps on the pond. 3 wells with wire fire hose hook ups and a water truck with fire hose too. The only problem I have when we have a fire is bypassing the states barricade to get home.
 
Fireballsocal said:
Run it. Don't stop. They won't chase you.
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I wish that were true, and maybe some cops wouldn't, but I've seen them chase someone down. It is bullshit though and the main reason I won't leave until I, not the fire department or police, decide to leave.
 
AlpineFunco said:
I wish that were true, and maybe some cops wouldn't, but I've seen them chase someone down. It is bullshit though and the main reason I won't leave until I, not the fire department or police, decide to leave.
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Yep, same. Once you leave, no returns until the fire is put out. Hopefully you brought chonés. Otherwise…

 
Yeah, that's what I do now just drive around them without stopping or just take a off road detour around them. When the big fire went through and the fire guys left. I needed more gas for the water pump. I stopped to talk to one of the cops on the way and he told me I couldn't go back. I told him he's nuts and drove around him when I came back.The other stupid thing that happened that night was when the fire was heading my way I was sitting by the highway at the end of the driveway and 6 fire trucks pulled up and stopped. A captain gets out and looks up my driveway and asked what was up the driveway. Told him two houses. He takes his flashlight shines it up the driveway and asked how long is it. Told him 1 mile. He told he couldn't help me because my driveway is gravel and all the fire engines are Class A and can't leave pavement. I asked him what are you doing out here because 99 % of the houses out here are like this. He looked at me and said we're here for the overtime. Come to find out the house they protected was the only one in the valley that burned down. But to give them credit it burned down after they left because the vegetation in a river behind was still smoldering.
 
AlpineFunco said:
I wish that were true, and maybe some cops wouldn't, but I've seen them chase someone down. It is bullshit though and the main reason I won't leave until I, not the fire department or police, decide to leave.
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You need to do what you think is best. I'm blowing the road block at speed, horn blowing and upshifting. It's an emergency. Been through the Panorama as a boy, the knoll, toilet paper fire, and the Old/grand prix/padua fire. No one is going to use your stuff to protect your home unless you and family are there. No one will "let" you by. I take the initiative. You have a great setup to work from. I assume you have the veg cleared well away from structures and some family to help you set up. Don't forget PPE. Goggles, a good mask or respirator, and cotton head to toe. Nomex is even better.
 
Fireballsocal said:
You need to do what you think is best. I'm blowing the road block at speed, horn blowing and upshifting. It's an emergency. Been through the Panorama as a boy, the knoll, toilet paper fire, and the Old/grand prix/padua fire. No one is going to use your stuff to protect your home unless you and family are there. No one will "let" you by. I take the initiative. You have a great setup to work from. I assume you have the veg cleared well away from structures and some family to help you set up. Don't forget PPE. Goggles, a good mask or respirator, and cotton head to toe. Nomex is even better.
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I agree completely. Just saying I have heard of instances where someone got chased down.
 
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