Josh Altman, a real estate star of Los Angeles and Los Angeles real estate agent, previews a update to recover fire and reconstruction efforts, and preview President Donald Trump from disaster sites.
Has been a real estate insurance rate Years increase in the United StatesAnd a number of factors contribute to this problem, including inflation, expanding building to high -risk areas, and capturing natural disasters against disaster.
Destruction of Continuous fires in California And last year's storms in the southeast create the fear that huge Heat insurance companies obtain in those states – at least partially – by national companies that have not been affected in other states, rates Increase their own.
A view of the sun is dawn beyond houses burned on January 21, 2025 in Alitania, California. Multiple fires that have been fueled by the Santa Anna's heavy winds have been burned all over Los Angeles and have left at least 27 dead wins w (Mario Tama / Getty Images / Getty Images)
A source that supports this concern from a The study of 2022 from Harvard The School of Commerce, entitled “Climate Risk Insurance Price: Cross Subsidies and Subsidies”, which concluded “households in low -risk states (danger) inappropriately tolerate household risks in high friction countries.”
In Insurance industry He says this is not true.
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Robert Gordon, SVP, says he does not challenge some of the data used in the study, but argues that its conclusion is wrong.
In an interview, he explained that the insurance has been arranged and that each state prohibits discriminatory or excessive rates. Therefore, regulators do not allow companies to pay excess rates arbitrarily.
One of the homeowners after Helen's storm on the horse's horse beach, Florida, inspect his home damage on September 28, 2024. At least 44 people were killed in the five states of the United States who were beaten by Helen's powerful storm. (Chandan Khanna / AFP through Getty Images / Getty Images)
He noted: Beyond such a by -law is one of the competitive industries. There are thousands of insurance companies, hundreds of people in each state and many are not national companies, but only government or regional insurers.
West Coast will have “long -term” insurance challenges following the destruction of the fire
“So, if a national insurer in California loses his money, that does not mean that he can raise his rate in Iowa or Vermont or any other state because it competes with all these carriers, as many They do not even work in California, so they do not increase their rates because of California's losses. Business of the foxHuman
He compared the situation with the gas station. Where, if it is harmful to California, for example, the company does not increase the price by 50 % in Oklahoma, as everyone goes to a different gas station earlier in the state.
Smoke pots are seen as a brush fire in the Pacific Ocean, California on January 7, 2025. (David Swanson / AFP through Getty Images / Getty Images)
Whenever the insurance rate increases significantly, companies are seeing increased policy owners around companies and replacing companies. This is what the industry now sees.
While the authors of Harvard and the insurance industry disagree with the conclusion of this study, they agree on several points, including What happens in CaliforniaWhich has escaped insurers in recent years because regulators do not allow participants to increase the rate to reach the market.
Which insurance companies have the most in California?
“What we see in many states by suppressing rates is that you have these remaining explosive markets-they have government insurance programs,” Gordon said. “And those government -subsidized government insurance programs, especially the most at risk – surprisingly, very important environmental risk signals such as: do not create in forest areas or do not create stormy areas and if you do Make sure there is a good risk reduction (such as) better building codes and so on.
Jim Desmond, the head of the San Diego city, criticizes the California insurance regulations, which were carried out in the “lower line” before the Los Angeles County Fires.
He added that when states suppress the insurance rates and subsidize the programs of disaster programs with government insurance programs such as California's fair program, such programs appear to be reducing market rates. But all that really does is the mask of those signals.
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The authors of Harvard, Sangmin Oh, Iishita Sen and Anna-Maria-Maria Technaria wrote in their conclusion that “when rates are no longer reflecting the dangers, the information role of the insurance rate is decomposed.”
“(O) long -term adjustment friction can prepare insurers to deal with major damage, and insurers may respond to markets in general or release important product features.”