Could be worse, we could live in California

[CJD]

This article unintentionally makes a fantastic argument for why insurance should be provided by government rather than private business.

Quote:Consider what State Farm has gone through in the past few years. In light of soaring costs, it recently tried to raise the price of fire insurance. Instead, the state forced the company to cut rates. That’s a quick way to drive companies out of business, since they can’t make enough money to cover payments to people who file claims. This is Economics 101, which apparently doesn’t get taught in California classrooms.

In other words, the insurance companies tried to price out people who needed their insurance because it was too costly to their bottom line to actually provide insurance for their customers.

If you remove the profit motive and provide certain types of insurance as a safety feature subsidized by the government in the interest of protecting its citizens from ruinous catastrophes (like forest fires burning their house down) and insuring their safety and prosperity, the customers would be better off.

As a side note, I found this part funny:

Quote:I say this as the CEO of insurance and real estate companies. I also moved my business out of California several years ago, largely because the state makes it harder to serve customers. I firmly believe that State Farm had no choice but to leave California. If it had stayed, it would have been regulated to death.

It's always nice when opinion writers are up front and honest about their inherent biases regarding the topic they're "critiquing."