given the extent of the loss and value of the properties, what is the effect on insurance carriers and coverage? not sure if this has been posted here…..
California was already heading toward what we see in Florida — brand name carriers basically leaving the state as related to homeowners insurance, leaving the market in dire straits with nowhere near enough coverage, far higher deductibles, and far higher prices. Will we under-capitalized, financially unreliable California-only insurers dominating the homeowners market like we see in Florida? I hope not — it’s a recipe for instability. But the CA insurance commissioner has perverse incentives to do exactly the wrong thing.
When it comes to commercial properties, I’m more optimistic. We will still see higher deductibles and prices, and some pullback on capacity/availability, but I don’t think it will be nearly as extreme.
Tough to say at this point though. This topic is being actively debated now within the industry.