The California home insurance conundrum


As a California homeowner, I’ve watched with dismay as homeowner insurance provider after homeowner insurance provider have fled the state in the face of wildfire risk.

It was quite the shock when I discovered recently (HT: Axios Markets newsletter) that, according to NerdWallet, California actually has some of the cheapest homeowners insurance rates in the country!

It begs the Econ 101 question — is it really that the cost of wildfires are too high? Or that the price insurance companies can charge (something heavily regulated by state insurance commissions) is kept too low / not allowed to vary enough based on actual fire risk?


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