Odd Lots Why Home Insurance Markets in California and Florida Imploded
31 snips
Mar 21, 2024 
Amias Gerety, a partner at QED Investors and board member of Kin, along with RJ Lehmann, editor-in-chief at the International Center for Law & Economics, discuss the turmoil in home insurance markets in California and Florida. They explore soaring premiums and the abandonment of markets by national insurers, attributing these issues to climate change and regulatory challenges. The duo also tackles the impact of roofing fraud and considers how new technologies could help stabilize the struggling insurance landscape. Expect insights that clarify this complex industry situation!
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Insurance Costs and Climate Change
- Insurance protects against infrequent losses, but climate change is increasing their frequency.
- The cost of insurance has to reflect the increased risk, impacting homeowners.
Pricing and Competition
- Insurers face a dilemma: raising prices can drive customers away, especially with agent-based models.
- This creates a first-mover disadvantage, making repricing slow and messy.
Market Exits and Regulation
- Insurers pulling out of markets often signals a disagreement with regulators over pricing.
- It's a negotiation between insurers wanting higher prices and regulators wanting affordability.
