How bad have things gotten in California? If you are somehow doing well enough to be able to afford to buy a new home there, you may not be able to get homeowner’s insurance. Or at least not from State Farm. The insurance giant announced yesterday that it will not be offering new homeowner insurance policies in the state, though they will continue to honor existing policies. The company is citing a variety of reasons including “catastrophic events” and skyrocketing construction costs. But I’m confident that we can all read between the lines and figure out that there is more to the story than that. (CBS News)

State Farm said it will no longer accept new applications for home and business insurance in California because of an increase in catastrophic events and construction costs, the company announced Friday.

“State Farm General Insurance Company made this decision due to historic increases in construction costs outpacing inflation, rapidly growing catastrophe exposure, and a challenging reinsurance market,” the insurance company said in a statement.

The new guideline took effect Saturday and includes all business and personal lines property and casualty insurance.

State Farm lost more than $4 billion in 2021 in California and their profits haven’t recovered. It’s true that there were a lot of wildfires in the state that year, with more than 7,300 being recorded. There were slightly more last year. But with the recent “atmospheric rivers,” the wildfires have decreased dramatically. Flooding is actually more of an issue in some areas.

It’s also impossible to deny that construction costs have been on the rise. But that’s because everything costs more in California, largely due to the state government’s disastrous mismanagement combined with inflation driven by policies in Washington. That can’t be the entire story.

It sounds as if the company is too polite to bring it up, but don’t you suppose that home and business insurance is also no longer profitable because of rampant crime combined with homeless encampments driving down property values? Every time gangs of retail looters come in and empty out a store and destroy the windows and other structures, the store files insurance claims. When mobs loot people’s homes or set them on fire, more claims are filed. All of that adds up after a while.

Keeping an insurance company profitable relies on the majority of policyholders rarely or never needing to file a claim. Payouts are made to the exceptions to that rule. But bad things happening to people in California is no longer the exception. It’s the rule in many areas. Some of the stores that have closed down have cited their inability to obtain affordable insurance anymore.

On top of all of the crime and violence, California imposes strict regulations on the sale and handling of insurance policies. They make it challenging to turn a profit during the best of times. All of these issues can be traced back to Democratic policies that have produced more crime, less opportunity, and a depreciating quality of life. Is it any wonder that insurance companies are pulling out? So have major chains of drug stores and grocery stores. Congratulations, Democrats. You’re managing to turn one of the formerly most beautiful and prosperous states in the nation into a ghost town.

Here’s a short video from NBC News with a few more details.