S&P Sees Long-Term Rating Risk to California as Home Insurers Retreat
- Higher premiums could intensify Golden State exodus, S&P says
- Wildfires, rising rebuilding costs prompt insurer withdrawals
Homes in Sacramento, California.
Photographer: David Paul Morris/BloombergThis article is for subscribers only.
With California’s population in decline, rising home insurance premiums threaten to intensify the exodus and further weaken state and local finances, S&P Global Ratings Inc. warns.
The ratings firm sees a retreat by insurance companies — prompted by wildfires, skyrocketing rebuilding costs and regulatory limits on rate increases — as poised to push the state’s already high homeownership costs even higher, according to a report Thursday. Reduced competition among the remaining insurers is expected to lead to higher prices and fewer options for current residents or those considering a move to California.