Los Angeles fire survivor is told State Farm’s $900K check on hold due to insufficient funds
Los Angeles fire survivor is told State Farm’s $900K check on hold due to insufficient funds
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That's pretty alarming when a major insurance company is out of cash...
Insurance distorts housing markets, allows builders to take unreasonable risks, etc.
I strongly suspect that this is some kind of internal fuckup, not State Farm being insolvent.
probably just waiting so they can get some interest before releasing the funds first.
As someone that works in corporate America that would take too much common sense to execute on, its likely incompetence.
I thought that the company that had the fire insurance in Cali wasn't State Farm proper. It is a spin off specifically for home insurance there. I could also be wildly wrong.
I'm sure the national state farm corporation spun off shell companies to reduce liability in these high risk areas.
Conservatives love talking about pensions funds needing to be solvent for decades...
But there's never a push that insurance companies need to have cash on hand.
They keep their money in investment accounts to make a profit on it, so how much they have varies at any given moment.
When large scale disasters strike and the market is down they're fucked. If they liquidate at the low price not only does it cost them money. At a large enough volume it excarbates the market being down.
Enough insurance claims at once and it could crash the whole economy.
People don't realize how many different ways we're fucked...
Yes, but they use reinsurance companies to spread the risk around the globe. The whole world economy might be down, but there is unlikely to be major insurance events in all countries at once. Covid claims could have broken that but most insurance decided not to cover it.
They aren't out of cash they simply gave their execs too many bonuses. I guarantee their deficit could be offset by reducing leadership pay to something more realistic.
it’s almost certainly a subsidiary of a subsidiary, created solely to hold a minimally funded bank account