State Farm will discontinue coverage for 72,000 houses and apartments in California starting this summer, the insurance giant said this week, nine months after announcing it would not issue new home policies in the state.
Another view...
Inside America's Homeowners Insurance Crisis (October 2023)
www.newsweek.com
... Inflation and more frequent natural disasters are pushing up the cost of home insurance in the United States, adding another burden for homeowners at a time of record mortgage rates and high house prices.
Across the country, Americans are noticing a spike in homeownership insurance premiums, with states seeing a rise in natural disasters, such as California, Florida and South Carolina, feeling the pinch the most.
More than 60 percent of Americans say that their home insurance premiums got more expensive over the last year, according to a Harris poll survey via NerdWallet from July. These soaring costs are discouraging potential buyers from purchasing homes, the survey showed.
Elevated inflation has made the cost of building more expensive, and unpredictable weather changes are costing insurance companies more, which, in turn, are forced to hike their rates.
"In the first half of 2023, homeowners and commercial property claims costs increased by 36% and 30% respectively [year-on-year], driven up by inflation and natural catastrophe losses," according to the insurance giant Swiss Re.
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Homeowners loss was highest in over a decade, the company said. "Partly as a result, insurers are restricting business in catastrophe-prone markets," Swiss Re added.
Swiss Re points out that in California, one of the world's largest economies, insurance companies are pulling back, limiting the options available for homeowners. Worryingly, homeowners are also choosing to go without insurance: only about 88 percent are insured today, compared with up to 95 percent a few years ago, Swiss Re said.
"There is an estimated 20% less availability for insurance options than a year ago," the company said. ...
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