About 1,600 policies for Pacific Palisades homeowners were dropped by State Farm in July, the state insurance office says.

Perhaps the most interesting part of the article:

  • @[email protected]English
    1•3 days ago

    It’ll go up, sure. There’s nothing magical about the price of the property, though, as a line for making insurance worthwhile. You pay an annual rate, and an insurer will just expect that whatever you’re paying over the will pay for the cost of the property within the period of time until they expect the property to burn on average.

    If it’s a hundred years, it might be – discounting, for simplicity, the time value of money – 1% of the property value annually. If it’s six months, it might be 200% the value of the property annually. The 100% mark isn’t a special line in terms of insurance making sense.

    It’d certainly make the property more expensive to own as that percentage goes up, but that’s true whether you insure it and spread that risk over many houses or don’t insure it and pay for the loss of the thing yourself.

    • @ampersandrewEnglish
      4•3 days ago

      Isn’t it though? If my choice is to pay 200% of the value of the property annually or to not have insurance, why would I opt to have insurance? The best they could do is pay out less than I paid them.