To sum up: the WSJ arguably tried to make this into a very simple "over-regulation is killing the market" story by ignoring *what kinds of companies* are actually selling insurance in the two different states. The story is more complex. Ultimately, though, both states are truly struggling. That's the important story.
Fantastic article, thank you. It felt framed by Albert O Hirschman's Exit, Voice, and Loyalty about how to decide whether or not to stay, and I'd never thought about the long-term consequences if no one uses their voice to improve the systems.
I’m curious how you view the comparison in terms of the cause of market instability in CA vs FL. I’m still trying to come to terms with all of it, but they seem very different.
In other words, Florida insurance folks point to tort reforms as their saving grace (and thus blame legal abuses for making the environment difficult to operate in). Do you have any thoughts on their strain being rooted in claims going to court (vs. high catastrophe losses from storms fueled by climate change)?
California seems more straight forward: wildfires are destructive, insurers think that risk is getting very high, and they don’t think they can get adequate pricing to write policies for that risk.
(I realize all of this is somewhat besides the point, since your piece is something of a call to action for insurers to get involved in mitigation/building codes/zoning etc… but the WSJ article has me thinking about the above so I wanted to ask)
I'm not persuaded that tort reforms are leading to lower bills for homeowners. See https://ar.casact.org/the-verdict-on-floridas-tort-reforms/. I also think that inflation is playing a role in higher claims. So it's a bunch of things. At the same time, there's a glut of houses for sale in Florida Gulf Coast counties, and many complaints about the coverage and price of home insurance from (quoting WSJ comments) "fly-by-night" insurance companies doing business there.
To sum up: the WSJ arguably tried to make this into a very simple "over-regulation is killing the market" story by ignoring *what kinds of companies* are actually selling insurance in the two different states. The story is more complex. Ultimately, though, both states are truly struggling. That's the important story.
Fantastic article, thank you. It felt framed by Albert O Hirschman's Exit, Voice, and Loyalty about how to decide whether or not to stay, and I'd never thought about the long-term consequences if no one uses their voice to improve the systems.
I’m curious how you view the comparison in terms of the cause of market instability in CA vs FL. I’m still trying to come to terms with all of it, but they seem very different.
In other words, Florida insurance folks point to tort reforms as their saving grace (and thus blame legal abuses for making the environment difficult to operate in). Do you have any thoughts on their strain being rooted in claims going to court (vs. high catastrophe losses from storms fueled by climate change)?
California seems more straight forward: wildfires are destructive, insurers think that risk is getting very high, and they don’t think they can get adequate pricing to write policies for that risk.
(I realize all of this is somewhat besides the point, since your piece is something of a call to action for insurers to get involved in mitigation/building codes/zoning etc… but the WSJ article has me thinking about the above so I wanted to ask)
I'm not persuaded that tort reforms are leading to lower bills for homeowners. See https://ar.casact.org/the-verdict-on-floridas-tort-reforms/. I also think that inflation is playing a role in higher claims. So it's a bunch of things. At the same time, there's a glut of houses for sale in Florida Gulf Coast counties, and many complaints about the coverage and price of home insurance from (quoting WSJ comments) "fly-by-night" insurance companies doing business there.
Interesting - thanks for the response. Love your pieces!