January 25, 2023

Bisnow Quotes Ryan Lapine on Why Insurers Are Leaving California

2 min

On January 25, 2023, Ryan Lapine was quoted in Bisnow regarding the number of insurers leaving the state of California.

According to the article, California’s weather patterns over the last few years have caused millions of dollars in property damage, making insurance companies reconsider their positions in the state.  Insurance rates are skyrocketing, and many insurers are leaving the state because of losses, claims, and regulations. It is a sign of strain in the insurance industry, which will likely worsen with the weather and future natural disasters.

In the meantime, insurers are also expecting bad weather to create more gaps in coverage for businesses in the future, likely straining profitability for businesses and commercial property owners.

While business owners can often purchase additional coverage for business interruptions due to losses caused by natural disasters, many insurance companies increasingly avoid offering that coverage entirely, said Lapine.

“What we've seen is that many insurers in areas susceptible to losses from flooding, earthquakes and mudslides are simply not writing policies for business interruption with that coverage at all,” he said. “And so, a lot of folks are unprotected. It's really a pretty tricky environment at present.”

While insurers have a legal obligation in California to find coverage for policies as it exists, they also have a business obligation to look for eligible exclusions, and if the costs of paying out claims continue to rise, it’s more likely that insurers will continue to cease offering coverage in the state, said Lapine.

Click here to access the article.