FOX 2: State Farm Won’t Renew 72,000 Home and Apartment Policies in Calif. Because of Inflation, Regulatory Costs

VACAR voice over From ░░░░░░░░ air the fourplex in ░░░░░░░░ that Alexander Lee s ░░░░░░░░ owns has been insured ░░░░░░░░ State Farm for almost ░░░░░░░░ decades no claims This ░░░░░░░░ State Farm called him ░░░░░░░░ a shocker His policy ░░░░░░░░ not be renewed Lee ░░░░░░░░ said Oh man it ░░░░░░░░ me because I ve ░░░░░░░░ with you guys 38 ░░░░░░░░ no claims Am I ░░░░░░░░ only one Am I ░░░░░░░░ only apartment or is ░░░░░░░░ going to be more ░░░░░░░░ He said Oh it ░░░░░░░░ gonna be California wide ░░░░░░░░ said Really California wide ░░░░░░░░ voice over Harvey Rosenfield ░░░░░░░░ of Consumer Watchdog and ░░░░░░░░ of Insurance Proposition 103 ░░░░░░░░ State Farm s last ░░░░░░░░ rate increase came just ░░░░░░░░ week ROSENFIELD That rate ░░░░░░░░ was approved assuming that ░░░░░░░░ sell insurance policies to ░░░░░░░░ who need it in ░░░░░░░░ state and now they ░░░░░░░░ canceling more people VACAR ░░░░░░░░ over David Schaefer is ░░░░░░░░ insurance broker who sells ░░░░░░░░ a wide variety and ░░░░░░░░ of companies SCHAEFER This ░░░░░░░░ definitely the worst it ░░░░░░░░ ever been in my ░░░░░░░░ years in this industry ░░░░░░░░ ve never seen it ░░░░░░░░ bad as it is ░░░░░░░░ VACAR voice over And ░░░░░░░░ this he says even ░░░░░░░░ insurer of last resort ░░░░░░░░ California FAIR Plan now ░░░░░░░░ with desperate new customers ░░░░░░░░ pay very high prices ░░░░░░░░ marginal non high quality ░░░░░░░░ is a bit shaky ░░░░░░░░ The California FAIR Plan ░░░░░░░░ has announced that it ░░░░░░░░ not prepared for a ░░░░░░░░ in the state of ░░░░░░░░ VACAR voice over Insurers ░░░░░░░░ they should be able ░░░░░░░░ predict future losses and ░░░░░░░░ rates using sophisticated computer ░░░░░░░░ models that predict future ░░░░░░░░ instead of being based ░░░░░░░░ outdated and obsolete past ░░░░░░░░ records UNKNOWN Companies would ░░░░░░░░ the ability to make ░░░░░░░░ case to the state ░░░░░░░░ now it s illegal ░░░░░░░░ California law for a ░░░░░░░░ that come in with ░░░░░░░░ model that shows if ░░░░░░░░ do right in higher ░░░░░░░░ areas how that would ░░░░░░░░ their future expected claims ░░░░░░░░ VACAR voice over But ░░░░░░░░ what cost to consumers ░░░░░░░░ I have seen premiums ░░░░░░░░ were clients of ours ░░░░░░░░ have been non renewed ░░░░░░░░ the cost of a ░░░░░░░░ policy is five times ░░░░░░░░ what it was before ░░░░░░░░ Your claim is I ░░░░░░░░ totally ridiculous to me ░░░░░░░░ get cancelled VACAR voice ░░░░░░░░ This is as serious ░░░░░░░░ it gets for the ░░░░░░░░ and national economy and ░░░░░░░░ re on it Tom ░░░░░░░░ KTVU, FOX 2.”