More California Insurers Pause Policies as State Law Prevents Profitability

Amid rising costs and state regulators saying insurers cannot raise their rates, an increasing number of large providers have paused writing new policies, saying doing business in California has become too expensive. According to a report from September by Insurance Information Institute—a New York-based organization that provides information on insurance to the consumer—insurers in California failed to collect more from their policyholders’ premiums than what they paid in claims between 2013 and 2022, with $1.08 spent for every $1 received. Part of the issue, according to the institute, is a 1988 measure, Proposition 103, which does not allow insurers to use risk-based pricing. This has prevented providers from using a forward-thinking approach, as they can only set rates based on “historical data,” such as fires in the last 20 years....