🚀 go-pugleaf

In article <lizn.775165665@amdahl.com>,
Elizabeth Neely <lizn@oes.amdahl.com> wrote:
>jparro@hsc.usc.edu (Jon Parro) writes:
>
>>There was a posting here about the crisis in California homeowner's
>>insurance with the proximate cause being the Northridge earthquake.
>>We've just entered escrow and are wondering how serious the problem
>>of obtaining insurance is.  Any comments?
>
>I had no trouble getting homeowners insurance AND earthquake insurance from
>CSAA for the house I purchased in May in Santa Cruz. I was NOT able to
>get insurance from State Farm (they said something about having to reduce
>their risk in the Santa Cruz area.) And although I was given a quote for
>insurance from Amica, the price was over 3 times CSAA's price, for the same
>coverage. I also got a quote from Farmers that was in the same range as
>CSAA's price. 
>CSAA required an inspection to make sure the house was in the condition
>I stated and had earthquake bracing.
>

My insurer, 20th Century, was based in the Northridge area, and had a strong
local following.  The property insurance company was very hard hit by
earthquake losses; essentially the capital base was wiped out.  While they
are paying all claims, the state insurance dept has told them their risk
is too concentrated, and they have to get out of the home insurance business
within two years.  The auto insurance division continues to operate as before.

I think this was the most extreme case.  Other companies are being evaluated
for potential concentration of risk, and are either being limited in issuing
new policies, or being required to "reinsure" to reduce the risk of a major
quake bankrupting the company.

The main effect seems to be to prevent companies from having too great of a
concentration of policies for their own good, a side effect may limit your
choice of companies for a while.

-tom