If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!

Welcome California to the Law of Unintended Consequences.

Insurance Commissioner Steve Poizner has announced that he is forcing Allstate to drop it’s homeowner insurance rates 28.5% so that the poor suffering people of California can pay their other bills. The average rate for Allstate customers in the state will now be $600.

And you know what, he has the power to do it. Of course with the wildfires and earthquakes it makes no sense to insure homes in the great state of California at such low rates so Allstate has stopped writing policies in the state.

And you know that the level of service the remain 850,000 customers will get will be minimal along with cancellations based upon the slightest reason.

Face it, why would you want to participate, even if it is the largest state, when the government stacks the deck against you. Allstate can not say to their customers, well the state lowered our income 28 percent so we will lower our coverage the same amount, can they?

Instead they will leave, the next disaster will have a bunch of underfunded, shallow pocket insurers in California who will be bankrupt the day after the disaster, and the population will wonder why they are getting screwed.

All I can say is when this happens, call your esteemed Insurance Commissioner Steve Poizner. Of course he will be all over the television screaming for tighter regulation of the insurance companies, populist morons like him do that all the time, when the suffering should be laid upon his doorstep.

When government creates an environment that honest businesses can not succeed, all that is left are the crooks and the thieves. Oh, and the politicians ducking for cover.

Poizner’s legal order, signed Tuesday, rejects Allstate’s request for a 9.3% increase in its homeowners insurance rates, and, instead, instructs the company to reduce its existing premiums by 28.5%. “In today’s sputtering economic environment, people need all the help they can get just to pay the bills,” Poizner said. “That’s why I’m pleased to order this tremendous rate cut.”

According to the Department of Insurance, the reduction should drop average Allstate premiums to around $600 a year. The new rates will take effect July 28.

The insurer will comply with the commissioner’s order, Allstate spokesman Peter DeMarco said. “We are reviewing the order in detail and communicating with the department about the process for adjusting the rates of our 850,000 homeowners policyholders in the state.” via The LA Times

Related posts:

1. State Farms Florida Customers See 50 Percent Increase In Insurance Rates
2. Homeowner Insurance Cancellations For Hurricane Risk Affecting Northeastern States
3. Title Insurance Fraud Put Under the Microscope
4. Title Insurance: A Necessary Evil, But Ripe For Change
5. Chubb To Offer Flood Insurance in Places Most Insurers Have Left