California insurance market: Trends and implications for real estate

🔎 Insurance Myth Vs Fact Myth: If I don't file a claim, my insurance company will lower my premium. Fact: Many people assume that avoiding claims automatically lowers thei insurance rates. The truth? Not quite. While some loss-free discounts exist, insurance premiums are influenced by more than just your personal claims history. They're also affect by how the insurance company as a whole is performing. Here's a look "behind the scenes" at why your rate might increase even if you haven't submitted a claim: ❌ Loss Ratio: This is the total amount an insurance company pays out in claims divided by the total premium it collects. If the company is paying out more claims than expected, premiums may rise - even for policyholders with no claims. 📈 Industry Trends & Catastrophes: Natural disasters, spikes in nationwide claims, or even inflation in repair costs can impact premiums. 💡Bottom Line: Keeping a clean claims record can help you qualify for loss-free discounts and avoid large increases, but it doesn't guarantee that your rate will automatically decrease at its renewal.

Raising personal property advanced payouts from 30% to 60% sounds like progress but does it actually solve the contents problem in claims? Insurance Commissioner Ricardo Lara is pushing for SB 495, which addresses how insurers handle personal property payouts after a declared state of emergency. In California, insurers must advance at least 30% of the contents coverage limit (Coverage C) without requiring an itemized list. SB 495 proposes to pay 60% of the policy limit with a cap of $350,000. When this passes, this will be a HUGE a win for policyholders as it reduces friction for families affected by catastrophic events. I do think, though, that it’s also important to realize that this bill isn’t a silver bullet. Here’s why: 1. If you suspect you have a loss above $350K and receive an advanced payout, you’ll still need to prove out the additional loss by supplying an inventory. A supplement payment for your loss will only be paid after a complete review of that inventory shows that the actual cash value (depreciated amount) of the claim exceeds the $350k advanced payout. 2. Everyday losses remain just as painful for policyholders and won’t qualify under this bill. So, if a home is destroyed in a standalone event, you’re on the hook for providing an inventory list to prove your personal property loss. I want to commend Commissioner Lara for pushing SB495 forward, it’s the right thing to do. I also want to surface how complicated these matters are and how tricky it can be to balance fairness at scale without bankrupting an industry. Some questions I have: The initial submission for the bill called for a 100% payout of Coverage C but was ultimately reduced. Do we believe personal property coverage is systematically over-insured? Should there be a $350k cap? Should this bill extend to all total losses, not just declared emergencies? What other steps would you take to reduce friction in contents claims? Here’s the link to the bill: https://lnkd.in/gpW8-_Wa

Have you ever asked the question of why am I paying an excess. This is a common question among insurance policyholders. Here are a few reasons why excesses are in place: 1. Risk Sharing - Excesses help to share the risk between the policyholder and the insurer. By requiring you to pay a portion of the claim, insurers can manage overall costs and reduce the number of small claims they handle. 2. Lower Premiums - Generally, higher excesses lead to lower insurance premiums. If you are willing to take on more financial responsibility in the event of a claim, you can save money on your monthly or annual payments. 3. Discouraging Small Claims - Excesses encourage policyholders to avoid putting in claims for minor incidents, which can help keep insurance costs down for everyone. If every small issue resulted in a claim, premiums would likely increase. 4. Promoting Responsible Behavior - Knowing that you have to pay an excess might encourage more cautious behaviour, reducing the likelihood of accidents or damage. Understanding the role of excesses can help clarify why they are an essential part of many insurance policies. If you have concerns about your excess amount, it might be worth discussing options with your broker to find a balance that works for your financial situation. Accensure Insurance Brokers 021 592 0122

🔥 ₹15.71 LAKHS to ₹1.66 LAKHS: When a Landmark Ruling Changed Everything 🔥 A storm-damaged rice mill. A massive claim. A dramatic reversal by India's National Consumer Commission. This isn't just another insurance case—it's a masterclass in why CONTRACT CLARITY is the backbone of our industry. 📊 THE NUMBERS THAT SHOCKED EVERYONE: Stock Insured: ₹20 lakhs Actual Stock Value: ₹5.35 CRORES Claim Demanded: ₹38+ lakhs State Commission Award: ₹15.71 lakhs FINAL VERDICT: ₹1.66 lakhs ✓ Under-Insurance Ratio: 1:26 😱 ⚖️ WHAT THE COMMISSION SAID (And Why It Matters): 💡 "The insured cannot claim anything more than what is covered by the insurance policy" — Supreme Court precedent upheld 🎯 4 GAME-CHANGING PRINCIPLES: ✅ Contracts mean what they say — No adding, no subtracting, no creative interpretation ✅ Professional surveyors aren't optional — Their assessments carry legal weight when done right ✅ Under-insurance has consequences — Insure for ₹20L but hold ₹5.35Cr? Pay the price. ✅ The Average Clause is real — Partial losses get proportionate payouts 🎯 WHY THIS IS A WATERSHED MOMENT: FOR POLICYHOLDERS: 🚨 That "small premium savings" from under-declaring? It could cost you MILLIONS in a crisis. 💰 Want full protection? Declare full value. Simple. FOR INSURERS: ✨ Professional integrity WINS in court 📋 Document everything. Survey professionally. Follow the contract. ⚖️ Fair ≠ Unlimited. Fair = As Per Agreement. FOR THE INDUSTRY: 🛡️ This ruling strengthens the entire insurance ecosystem 🤝 When contracts are honored, trust grows 📈 Sustainable insurance needs clarity, not chaos 💥 THE REAL STORY HERE? This wasn't about denying a claim. The insurer PAID exactly what the policy covered. The surveyor did their job. The system worked. The rice mill owner wanted ₹38 lakhs on a ₹20 lakh policy covering ₹5.35 crores worth of stock. That's not insurance fraud. That's insurance mathematics. 📐 🔮 WHAT THIS MEANS FOR YOU: 📍 Business Owners: Review your coverage TODAY. Are you actually protected? 📍 Insurance Pros: Use this case in your client conversations. Real numbers. Real consequences. 📍 Risk Managers: Under-insurance is the silent killer of protection strategies. 💬 THE QUESTION EVERYONE'S ASKING: Should insurers be more flexible with policy terms, or is strict adherence the only way to maintain industry integrity? Drop your thoughts below. Let's have this conversation. 👇 Reference: FA No. 1103/2016, National Consumer Disputes Redressal Commission Date: May 16, 2025 #InsuranceClaims #RiskManagement #LegalVictory #InsuranceIndustry #BusinessProtection #ClaimsSettlement #InsuranceLaw #IndianInsurance #NCDRC #ConsumerLaw #RiskMitigation #InsuranceFacts #BusinessLaw #FinancialProtection #InsuranceTips

In this story from Reuters' The Insurer, PIFF's Michael Carlson shares insight on the Florida insurance market moving from deeply unbalanced to cautiously stable. More in "Reforms fuel Florida insurance revival:" https://lnkd.in/exvVFh4T

Florida homeowners are experiencing property insurance rate reductions: in fact, Panhandle-based insurance agent Trey Hutt notes an average decrease of 10.3% over the past year in his area. These lower rates come directly on the heels of the 2022 and 2023 reforms that addressed lawsuit abuse and curbed incentives for inflated claims. The result is a market that has been stabilizing for the past 12 months by every key measure, after multiple years of steep premium hikes. Consumers are benefitting from more carriers competing for their business, and the proof is in the rate filings: declines instead of double-digit increases. Florida is showing that litigation reform works. By curbing abusive practices and creating room for healthy competition, lawmakers have set the stage for a stronger, more resilient insurance market that puts homeowners first. https://lnkd.in/exrbuW9s

Florida has approved two new property insurers, Stand Insurance Exchange and Praxis Reciprocal Exchange, to enter the market, offering various coverages including homeowners multiperil and inland marine. This move follows recent legislative reforms that have encouraged new companies to join and helped reduce reliance on the state-backed Citizens Property Insurance Corp. The increased competition is expected to contribute to lower homeowners insurance rates in Florida. - Stand and Praxis plan to transfer 25,000 policies from Citizens Property Insurance. - Praxis will also offer boiler and machinery insurance. - The state’s top auto insurers are requesting rate decreases, reflecting broader market improvements. The entry of these insurers highlights ongoing positive changes and growing competition in Florida’s property insurance market. Read more: https://lnkd.in/dc9Gr8GV #PRESWERX #FloridaConstruction

https://lnkd.in/essacArB Good news for Florida Homeowners! The Florida Office of Insurance Regulations just approve two new insurance companies: Standard Insurance Exchange & Praxis Reciprocal Exchange to write homeowners in Florida. This means more competition, more options and potentially lower rates for homeowners.

New 6th DCA Opinion: Upholding summary judgment for insurer where insured did not reside at property. Pitts v. Universal An insured husband and wife obtained an insurance policy and renewed same. Following the death of the husband, the wife deeded the property to her trust, then entered assisted living and began renting the property to tenants. "Although she hoped her move would be temporary, she never returned to the Property and for the years that followed she continued to renew her same policy with Universal, never notifying Universal that she had moved out of the Property and tenants had moved in." Following her death, the successor trustee inspected the property and discovered water damage, and a claim was reported to the insurer. The insurer initially paid for remediation, but when it learned of the named insured's living situation, it denied the remainder of the claim for lack of coverage. A lawsuit followed. The insurer obtained a summary judgment that no coverage was owed as the insured property was not the "residence premises" as defined by the policy. In opposition, the successor trustee argued that (1) the policy was ambiguous and (2) the insurer waived the right to deny coverage by accepting premiums and issuing partial payment. The trial court rejected these arguments and entered judgment for the insurer, and the matter was presented to the 6th DCA on appeal. The 6th DCA upheld the summary judgment. The policy required the named insured to reside at the property to obtain coverage for the loss. The definition of "residence premises" was not ambiguous. There was no waiver because knowledge of the trust was not evidence that the insurer accepted premiums with the knowledge that the insured no longer resided at the property. In addition, an insurer can generally only waive forfeiture provisions, such as post-loss obligations, and not coverage provisions like the insuring agreement or policy exclusions. The initial payment did not waive the insurer's right to later deny coverage when it learned the insured did not reside at the subject property.