alt Hacker NewsCalifornia law limits how high the insurance companies can charge for premiums. Did that law or those limits exist when they started offering coverage in the area?
Maybe they didn't, and then the law or limits were imposed at a time when the insurance companies needed to increase the premiums to match the new risk. But if the law prevents them, then they have no other choice but to pull out. Why would they as a business stay if the risk is to great for the premiums they are allowed to charge? They certainly are not obligated to stay.
Meanwhile in Florida:
But it is possible that more private insurers in Florida, who have to adhere to state guidelines for how much they can raise premiums, will cancel policies after this year’s hurricanes, leading more people to turn to Citizens, Rappmund said. “When you don’t allow the price to be matched to the risk, then the private companies can’t make a business there and they retreat.”
Still, if fewer private insurers want to do business in Florida, Citizens would likely need to push for higher rates on its customers more and potentially even reworking what its policies cover, Rappmund told CNN.