Ep. 417 Kristian Fors on How to Fix Homeowners Insurance in California
Kristian Fors is a research fellow with the Independent Institute. He joins Bob to discuss his new policy report, which explains why so many insurers are pulling out of the California homeowners market, and how to fix it.
Mentioned in the Episode and Other Links of Interest:
- The YouTube version of this interview.
- Kristian Fors’ policy report on the CA homeowners insurance crisis. Independent Institute’s Golden Fleece awards.
- The link for Monetary-Metals.com.
- Help support the Bob Murphy Show.
About the author, Robert
Christian and economist, Chief Economist at infineo, and Senior Fellow with the Mises Institute.
Would have loved some exploration on why this is coming to a head now when prop 103 was passed in 1988
Good question, Neal!
Socialism eats up capital. Sometimes it takes a couple of decades for the capital to be exhausted.
Prior to Prop-103 california had something closer to market prices. Prop-103’s intervention built-in a feedback bias that depresses rate increase in a recursive manner, since next year’s artificially depressed, permitted prices will be based on this year’s depressed permitted prices.
The cumulative effect has been eroding profitibality in the market, squeezing out the marginal providers and insurance classes first.
This system slowly approaches a threshold of absolute forseeable unprofitability, and once that’s crossed, that’s when you see a ‘sudden effect’.
Even though I’ve never seen his father, he looks as though he would his spitting image.