All articles tagged with #insurance market
Health insurance companies in Texas are requesting an average premium increase of 24% for ACA plans in 2026, driven by rising healthcare costs and the expiration of expanded tax credits, which could lead to higher costs for consumers and a potential shrinking of the marketplace, especially affecting rural, low-income, and elderly populations.
Two more insurers, Tokio Marine America Insurance Co. and Trans Pacific Insurance Co., both units of Japan-based Tokio Marine Holdings Inc., are set to withdraw from California's property insurance market in July, impacting 12,556 policies with premiums of $11.3 million, further straining the state's already challenged insurance market.
A recent study led by researchers at Harvard University, Columbia University, and the Federal Reserve Board warns that smaller, lower-quality insurers are replacing major private home insurers that have left Florida, leading to a crisis in the state's home insurance sector. These new insurers are found to be less financially stable and may not meet the minimum requirements set by government guidelines. The exodus of bigger private companies from high-risk areas in Florida has led to a reliance on approximately 50 small insurers, all rated by a single company, Demotech Inc., whose ratings differ significantly from those of other rating agencies. The situation has been exacerbated by factors such as excessive litigation, widespread fraud, and the increased risk of severe weather events due to climate change.
Florida has approved eight new insurance companies to enter the state's market, potentially stabilizing the fragile insurance market and providing homeowners with more choices. This move comes as homeowners struggle with high premiums, with some paying close to $5,000 a year for insurance. The companies' entry is seen as a positive sign for the market's health, and it follows efforts to address property insurance issues in the state. With the 2024 hurricane season forecasted to be very active, homeowners are advised to prepare and explore options to mitigate high insurance rates.
Homeowners insurance companies are leaving California due to state regulations preventing them from raising rates to reflect inflation and market conditions. State Farm is non-renewing existing policies and getting out of apartment policies entirely, while American National is also withdrawing from the state. The state's "protections" for policyholders affected by wildfires are not effectively addressing the insurance crisis, leading more Californians to rely on the FAIR Plan, an insurer of last resort. The state's bureaucratic hurdles and lack of competition are distorting the marketplace, and despite warnings, the state's leaders have not taken the necessary actions to address the insurance problem.
The home insurance market in places like New Orleans and California is crumbling due to climate change, leading to skyrocketing premiums and limited coverage options for homeowners. Insurers are raising premiums or pulling out altogether due to increased risks from extreme weather events, leaving many homeowners struggling to find affordable coverage. Some are forced to turn to state-supported "insurers of last resort" at significantly higher costs, while others are considering going without insurance due to the high additional costs and challenges of obtaining coverage.
The home insurance market is in turmoil, with homeowners across the US facing limited coverage options and soaring premiums due to climate change, increased severe weather events, and rising costs for insurers. Many homeowners are experiencing significant premium increases or having their policies canceled, forcing them to seek coverage from state-supported insurers of last resort at much higher costs. The situation is particularly dire for those living in high-risk areas, with some insurers ceasing to issue policies altogether. As a result, some homeowners are struggling to afford insurance and are being driven to forgo coverage, raising concerns about the growing number of uninsured homes and the need for stronger oversight and climate change adaptation measures.
State Farm, California's largest home insurance company, is discontinuing coverage for 72,000 homes and apartment policies in the state due to inflation, regulatory costs, and increasing catastrophe risks. This decision follows last year's halt on new home insurance applications and a 20% rate increase for existing customers. AllState and other insurers have also paused new policy sales in California, leaving many homeowners to resort to state-run insurance programs with higher premiums.
State Farm will discontinue coverage for 72,000 houses and apartments in California due to soaring costs, increasing risk of catastrophes like wildfires, and outdated regulations, impacting its financial health. This decision comes as California’s insurance commissioner works on an overhaul of home insurance regulations. The California Department of Insurance will question State Farm about its decision, and it remains unclear whether an investigation will be launched. Last June, State Farm announced it would stop accepting applications for property and casualty insurance, citing inflation and growing catastrophe exposure.
State Farm will discontinue coverage for 72,000 houses and apartments in California due to soaring costs, increasing risk of catastrophes like wildfires, and outdated regulations. The move comes as California's elected insurance commissioner undertakes a yearlong overhaul of home insurance regulations aimed at calming the state's imploding market by giving insurers more latitude to raise premiums while extracting commitments from them to extend coverage in fire-risk areas. The California Department of Insurance said State Farm will have to answer questions from regulators about its decision to discontinue coverage, and it was unclear whether the department would launch an investigation.
Florida's home insurance market has become dysfunctional due to surging property insurance costs, with average premiums costing homeowners $6,000 a year, more than triple the national average. Factors driving the insurance challenge include more frequent and costly natural disasters, skyrocketing reinsurance prices, and a litigation-friendly environment. Florida's response includes passing Senate Bill 2A, aiming to discourage needless lawsuits and restrict assignment of benefits, but the long-term impact remains uncertain, with other disaster-prone regions watching closely.
Humana's stock has plummeted after reporting a surprise loss in the fourth quarter due to higher usage in its Medicare Advantage business, with costs expected to remain elevated through 2024. The surge in older patients seeking care last year led to higher-than-expected costs, impacting the company's earnings forecast. The Medicare Advantage market is facing significant regulatory changes and increased medical cost trends, affecting companies like Humana and UnitedHealth Group. The industry may see disciplined pricing and slower enrollment growth in the future due to changing demographics.
California Rep. Adam Schiff has introduced the INSURE Act to stabilize the home insurance market by implementing federal reinsurance, requiring insurers to cover natural disasters, and establishing improved market monitoring. The bill aims to address the crisis in the home insurance market, particularly in California, where insurers have stopped writing new policies due to increased risks of natural disasters. The proposed act must pass through the House and Senate and receive the president's signature to become law.
The private insurance market for long-term care has failed to provide financial security for millions of older Americans, as insurers underestimated the number of policyholders who would use their coverage, how long they would live, and the actual cost of care. Only 3 to 4 percent of Americans 50 and older have long-term care insurance, despite federal estimates that 70 percent of people 65 and older will need critical services before they die. Insurers have raised premiums, narrowed the eligible pool of clients, and stopped selling stand-alone policies altogether. Many policyholders face difficult choices of paying more, reducing benefits, or dropping coverage. Experts argue that a government-subsidized or public program is needed to address the growing burden of long-term care costs.
California Governor Gavin Newsom has issued an executive order aimed at addressing the homeowners' insurance crisis in the state. Major insurance companies have been pulling back their coverage due to increased wildfire risk, leaving homeowners with limited options. The order allows insurers to consider climate risks when setting rates and aims to increase insurance coverage choices, particularly in wildfire-prone areas. It also seeks to expedite the approval process for insurance plans. While some consumers may see modest price increases, the goal is to ensure that insurance is available to those who currently cannot obtain coverage. However, advocacy group Consumer Watchdog has raised concerns about potential price increases for the majority of homeowners and the prioritization of a small percentage of the market. State lawmakers in fire-prone areas have welcomed the governor's action, while industry representatives have called for immediate policy solutions to protect consumer access to coverage.