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It won't be the insurance mafia.
Which is a mafia in a literal as well as rhetorical sense because it makes people offers they cannot refuse. They face repercussions - enforced by the state - if they fail to hand over money for . . . protection.
The latter often being declined once damages are incurred. People who thought they were or would be "protected"
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But thats only part of the worst of it. The other part will be arriving in the mailboxes of millions of people who don't live in California or North Carolina - in the form of "adjustments" (which always means an increase) in the cost of what they're obliged to pay for their - ahem - "policy" (as if this were a civilized transaction) to offset the losses incurred by the mafia in those and other places.
You didn't think really the mafia would absorb those losses - at the expense of its profits . . . ?
Just the same as people who do not own more expensive to repair and replace (as well as fire-prone) battery powered devices or homes burned down by them have had the cost of their protection summarily jacked up - by about 25 percent, on average.
The car insurance mafia can do this because it can.
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Apologists will say that's not so! Why, everyone is free to shop around for a better deal! Which is true - in the same way that a shop owner in a mafia-controlled city can deal with Luca Brasi - or some other mafiosi.
You do not get the free choice to not deal with the mafia.
This means that while you might get a slightly better deal from this "family" vs. that "family" - e.g., from State Farm rather than Geico - the fact that all the "families" know you cannot refuse an offer from one of them. Which means all of their offers are going to be much higher than they would be if you were free to say no to all of them
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Do you suppose the home insurance mafia will behave any differently given it has similar muscle at its disposal?
Everyone who has a mortgage is required by law to buy protection from the mafia. That by itself is not morally wrong in that anyone who has a mortgage has not yet paid for their home (which will never be their home in any meaningful sense given the property tax; a subject for another day) and that means someone else - the lender - could be left holding the bag if the home burns down. Ergo, the stipulation that the mortgage-payer pay for protection/coverage.
But there is no firewall to protect the owner of a home that has not burned down - and who has not cost the mafia a penny in losses in decades or even ever - from paying to cover someone else's (and the insurance mafia's) losses. This is not a hypothetical mugging. It has already been happening - before LA went up in smoke. After the losses incurred by
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It is extremely probable verging on certain that the losses incurred in California are about to be recovered elsewhere. As in your mailbox and those of millions of others who don't even live in California, because the tentacles of the octopus stretch far and wide and the suckers on those appendages are all-but-unavoidable, unless you are lucky enough to be among the very few who at least on paper "own" their homes and so do not (for now) have to pay the insurance mafia.
© EricPetersAutos.com
An interesting - in the Chinese proverb sense - nexus approaches. It is likely many homeowners will no longer be able to pay the insurance mafia - home and car and let's not forget health. Many people have already arrived at this nexus.
The choice will be to either pay the mafia(s) - plural - or pay for groceries and gas and other necessities.
Insurance may be considered a necessity by some but that is a perception not a fact. Groceries and gas and a roof over one's head are necessities and they will take precedence when people arrive at the nexus, which is probably just around the corner.
Or however long it takes for the mafias - plural - to send out their "adjustment" notices.
Over a couple of decades, fire insurance grew into the Canadian Underwriters Association which promoted not only better construction methods and materials but fire suppression systems as well. I remember holding some of the first sprinklers that were displayed in the CUA corporate 'museum'; bulky cast iron with a wax trip mechanism.
Things turned from technology and safety to a more 'business' model in the late 1960's and early 1970's, around the time Trudeau Sr. killed the Bank of Canada and Nixon killed the U.S. dollar. Sad to see what has become of what began as a literal saviour of people, shops and communities.