State Farm pulls Super Bowl ad, redirects focus to Los Angeles wildfires
As the Super Bowl draws near, companies are gearing up to unveil their most exciting ads for sports fans and consumers. State Farm, however, won’t be one of those companies.
The price for a 30-second Super Bowl commercial can top out at $7 million. Instead, the insurance giant says they will focus on helping those impacted by the ongoing wildfire crisis in Southern California.
A spokesperson for the company said, “Our focus is firmly on providing support to the people of Los Angeles. We will not be advertising during the game as originally planned.”
The decision comes shortly after State Farm offered renewals to policyholders affected by the Los Angeles County fires. The announcement reversed its initial plans last March to not renew 30,000 property policies in California last year. It included 69% of policies in the Pacific Palisades area –– which has been ravaged by the fires since Jan. 7.
At the time, State Farm cited increasing construction costs and an increasing frequency of natural disasters, including wildfires that pose a major risk to policyholders, for the decision to drop coverage.
Right now, more than 170,000 people still remain under evacuation orders. Officials say they must remove hazardous materials before residents can safely return.
Thanks to calmer winds over the past few days, firefighters are making headway against two major blazes in Los Angeles. The Palisades Fire, which is still the largest, has burned nearly 24,000 acres, while the Eaton Fire is 65% contained and has consumed more than 14,000 acres.
As of Friday, Jan. 17, State Farm says they received over 8,300 home and auto claims in affected areas. The insurance giant also says they have paid out over $50 million to policyholders who have filed claims since the fires began.
The company expects this number to rise once evacuation orders are lifted and residents can assess the damage to their properties.
Newsom bans some offers to buy destroyed Calif. properties after fires
California Gov. Gavin Newsom, D, signed an executive order this week to stop what he calls predatory real estate investors from taking advantage of wildfire victims. The order makes it illegal for anyone to make an unsolicited offer on property for an amount less than the fair market value in areas impacted by the Palisades and Eaton Fires for the next three months.
Newsom said the ban comes after hearing from people in the community who’ve received unwelcome and unfair offers.
“This predatory behavior is disgusting at the best of times and of course here in the midst of this tragedy, it’s disgraceful,” Newsom said in a video posted to X.
Today, I signed an executive order prohibiting greedy land developers from ripping off LA wildfire victims with unsolicited, undervalued offers to buy their destroyed property.
The ban, which is modeled after a similar order made by Hawaii Gov. Josh Green, D, for the Lahaina wildfires, is getting some criticism from Sen. Ted Cruz, R-Texas.
“Now, Dem politicians are making it harder for those devastated by the wildfires to sell their destroyed properties. This will only hurt the victims,” Cruz said on X.
Misguided CA policies (1) limited fire mitigation efforts, (2) produced water shortages & (3) under-funded fire fighters.
Now, Dem politicians are making it HARDER for those devastated by the wildfires to sell their destroyed properties.
Newsom responded to Cruz, “Our executive order doesn’t prevent anyone from selling their property. It prohibits scammers from making unsolicited offers to buy property for pennies on the dollar.”
Openly shilling for scammers and bottom feeder land speculators is a weird play — even for you, Ted.
Our Executive Order doesn’t prevent anyone from selling their property.
It prohibits scammers from making unsolicited offers to buy property for pennies on the dollar. https://t.co/agSnPwT1d4
The disaster left homeowners with several questions about insurance coverage.
State Farm reversed its initial plan to cancel hundreds of policies for homes in the Pacific Palisades over the summer to avoid “financial failure,” but is now offering renewals for policy holders in the Los Angeles area.
AccuWeather estimates the total damage and economic loss from the wildfires is at least $250 billion.
State Farm offers renewals for people affected by LA fires it planned to drop
State Farm says it will offer renewals to policyholders affected by the Los Angeles County fires. The announcement reverses its initial plans to drop coverage.
The decision affects policies for homeowners, renters and condo associations. It includes about 70% of the residential policies it has in Pacific Palisades.
The coastal community has suffered significant destruction in this month’s fires, with widespread damage and most residents forced to evacuate their homes.
Thousands of other policyholders around LA County will also be able to renew. However, the offer will not apply to policies that lapsed before Tuesday, Jan. 7.
The Illinois-based insurance giant drew criticism in California for its decision last March to not renew thousands of insurance policies in the state, as many areas in California face increased risk of natural disasters.
State Farm’s decision comes after the California state insurance commissioner’s office pushed insurers to hold off on not renewing policies for people in fire zones.
A spokesperson for the insurance commissioner said the office is working with State Farm to get more information.
How Florida’s state-backed insurance went from last resort to largest provider
It was meant to be the insurance of last resort. But along the way, Florida’s government-backed Citizens Property Insurance Corporation became the largest insurance provider in the state.
“Citizens Property Insurance, which was created decades ago, it is not solvent, and we can’t have millions of people on that, because if a storm hits, it’s going to cause problems for the state,” Florida Gov. Ron DeSantis said in February 2024.
“They are actually very financially secure this year,” Proffesor Charles “Chuck” Nyce, who serves as department chair of Florida State University’s Risk Management and Insurance, said. “I believe what Gov. DeSantis was trying to say is that we don’t want Citizens having this type of exposure and having the need to do assessments.”
Assessments happen when Citizens does not have enough money to pay its claims. First, it applies a surcharge to its own policyholders. But if that is not enough, the state requires Citizens to charge a premium to insurance holders statewide, whether with Citizens or not. Citizens will have to do this for as many years as it takes to plug the deficit.
They were designed to be the market of last resort…For 2021, 2022, 2023, Citizens was becoming the option of first resort.
Chuck Nyce, expert in risk management and insurance
Citizens told Straight Arrow News it “has the financial capability to handle a 1-in-82-year storm without having to levy assessments on non-Citizens policyholders.” For context, Citizens says 1992’s Hurricane Andrew was a 1-in-43-year event.
“Hurricane Andrew is what we kind of describe as a wake-up call,” Nyce said. “It was really the first experience for the insurance industry of what a large-scale catastrophe could look like in the United States. I started graduate school the year after Hurricane Andrew. So my entire academic career has been trying to figure out how to pay for catastrophes that can occur.”
Hurricane Andrew bankrupted several insurance companies, leaving hundreds of thousands in Florida without insurance. Other major insurance providers dramatically mitigated their risk in the state by shifting their focus more inland.
“Now the problem is, for the state of Florida, we have a lot of coastal exposure, so we had to find a way to still insure those properties that were out there,” Nyce said.
If we can solve it in Florida, it’ll be a great lesson to take to other states.
Chuck Nyce, expert in risk management and insurance
Local companies popped up to fill the gaps, while the state created two insurers of last resort that later merged in 2002 to become Citizens Property Insurance Corporation. Nyce said the system worked well until 2004 and 2005, when storms repeatedly hit the Sunshine State, causing tens of billions in losses.
For Florida’s insurance landscape, it was Groundhog Day. Insurance companies dried up and more left the state. But this time, they had a backstop in Citizens, and Citizens’ policies ballooned.
“They were designed to be the market of last resort,” Nyce said. “By 2010, 2011, there were 1.4 million policyholders in Citizens. The good news for the state is from 2005 through 2016 we didn’t have any landfalling storms.”
Citizens successfully shed policies back into the private market until it was down to a little more than 400,000 by 2019. But more storms and litigation costs again broke the private market.
“For 2021, 2022, 2023, Citizens was becoming the option of first resort,” Nyce said. “There was a number of areas where insurance was not available and not available at a fair price. So Citizens became the option.”
Policies swelled back to over 1 million in 2022 and now sit at 1.265 million as of Oct. 4, 2024.
In order to get customers off the state-backed Citizens and back into the private market, a private insurance provider must be willing to underwrite the client at a price that is no more than 20% higher than what they pay at Citizens. At that point, Citizens can “depopulate” that customer.
Depopulation is “trying to push Citizens back to a market of last resort rather than a first choice,” Nyce explained.
“I think it’s more attractive today to offer policies than it was over the last 20 years,” DeSantis said in February. “But, you know, Rome wasn’t built in a day.”
Citizens told SAN that before Hurricanes Helene and Milton, it expected to dip below 1 million policies by the end of 2024. These storms could put that goal in jeopardy.
“When losses get really bad, that’s when the state should come in,” Nyce said. “When they get really, really bad, that’s when the federal government should come in. But for the storms like Helene, that should be private market stuff that’s handling those types of things. But it’s an issue we have.”
Nyce said from an insurance perspective, homeowner policies used to be considered low-risk and relatively stable. But that’s no longer the case in much of the United States, andnd that’s when states see the private market disintegrate.
“If we can solve it in Florida, it’ll be a great lesson to take to other states,” Nyce said.
When it comes to insurance risks, it’s not just hurricanes in Florida and Louisiana. It’s wildfires in California, tornadoes in the Midwest and severe convective storms hitting everywhere in between. Florida may be the tip of the spear for storm exposure, but it does not stand alone.
Why more insurers are refusing to provide homeowners’ insurance
It’s not anecdotal: Extreme natural disasters are happening more often and causing way more damage. Insurance is supposed to be there to safeguard homeowners in case the worst happens to their property. However, in disaster-prone areas, some insurers are declaring that it’s too risky to keep doing business there.
“The last few years, insurers have lost money,” said Scott Holeman, a spokesperson for the Insurance Information Institute, known as Triple-I.
“If the combined ratio is under 100, insurance companies can make money,” Holeman explained. “If that combined ratio is over 100, that means they’re paying out more money than they’re taking in. And that’s not sustainable for any business to pay out more than what you’re collecting.”
For four out of the past five years, national data shows homeowners’ insurers have earned less in premiums than they’ve paid out in losses and expenses. Taking a closer look at markets like Florida and California, it’s no wonder insurers are jumping ship.
From 2016-2019, for every $100 in premiums Florida home insurers received, they paid out $117.50 in losses and expenses. On a national level, it was basically break-even over that time at $100.70.
Insurers are going to have to raise rates to stay in business or leave the market.
Scott Holeman, Insurance Information Institute spokesperson
Meanwhile, California insurers are still catching up from the fateful fire seasons of 2017 and 2018. Triple-I said that in the last decade, California insurers made healthy profits in the homeowners’ insurance business for eight out of 10 years. However, the combined ratio is still 108.1% over that time. That’s because for every $100 in premiums received, California’s home insurers paid out $241.90 in 2017 and $213.40 in 2018.
This year the state’s largest insurer, State Farm, said it would stop selling new home policies in the state. Allstate had quietly stopped selling them last year and announced the move after State Farm. Others have followed suit. Farmers has also significantly pulled back in Florida and California.
“Florida and California are seeing a lot of issues but it’s not just there — we’re seeing places like Arkansas and Mississippi were hit by tornadoes earlier this year,” Holeman said. “Insurers are going to have to raise rates to stay in business or leave the market.”
AAA backs off offering home, car insurance to Florida residents
AAA has become the fourth insurer to pull back from offering insurance to residents of Florida in the past year. The company said it will not renew the auto and home insurance policies for some customers in Florida.
“Unfortunately, Florida’s insurance market has become challenging in recent years,” the company said in a statement emailed to CBS MoneyWatch. “Last year’s catastrophic hurricane season contributed to an unprecedented rise in reinsurance rates, making it more costly for insurance companies to operate.”
AAA’s announcement came just days after Farmers Insurance announced it will no longer offer coverage in Florida. While the AAA change is only expected to affect “a small percentage” of policy holders, the Farmers decision will affect roughly 100,000 customers.
“We have advised the Florida Office of Insurance Regulation of our decision to discontinue offering Farmers-branded auto, home and umbrella policies in the state,” Farmers spokesman Trevor Chapman said in a statement to CBS Miami. “This business decision was necessary to effectively manage risk exposure.”
“With record-breaking inflation, severe weather events, and reconstruction costs continuing to climb, we are focused on serving our customers while effectively managing our business,” a spokesperson for Farmers told ABC10. “Effective July 3, Farmers will limit new homeowners insurance policies in California to a level consistent with the volume we projected to write each month before recent market changes.”
Between California’s wildfires and Florida’s hurricanes, natural disasters have proven to make insuring residents too expensive for insurance companies like AAA.
Hurricanes Ian and Nicole devastated Florida in 2022, causing billions of dollars in damage.
Home insurances is not cheap for residents either. Homeowners in Florida pay about three times as much for insurance coverage as the national average. Rates are expected to soar about 40% in 2023.
Russia halts grain flow, deadly storms pummel Northeast: July 17 rundown
Russia announced it is pulling out of the Ukrainian grain agreement, and severe storms pummeled the Northeast. These stories and more highlight the rundown for Monday, July 17, 2023.
Russia pulls out of Ukrainian grain deal
Russia has announced it has halted its deal to allow grain to flow from Ukraine to countries in Africa, the Middle East and Asia. The deal was struck in 2022, after Russia had begun its invasion of Ukraine, in order to avoid a global food crisis.
The announcement came just hours after a section of the key bridge connecting Crimea to Russia’s mainland exploded. Russia blamed the explosion on Ukraine, calling it a terrorist act.
Two people were killed and another was injured. While the Ukrainian military suggested the attack could’ve been Russian provocation, Ukrainian media said Ukraine’s security service used sea drones to blow up the portion of the bridge.
This is the second time the bridge has been targeted in recent months. Ukraine was behind another bombing last October.
Crimea serves as a major hub for Russia’s war in Ukraine. Access to the bridge is vital for Russian supplies.
More than 10,000 flights disrupted by severe storms
More than 10,000 flights were disrupted by severe weather across the northeastern United States. More than 2,500 flights have been canceled and nearly 8,000 more delayed, according to flight tracking data.
Jetblue has been significantly impacted, with 27% of its flights canceled and 43% delayed. The Federal Aviation Administration released a statement that said slow-moving thunderstorms were to blame.
5 dead, 2 missing in Pennsylvania flash flooding
Severe storms also created deadly flood waters in Pennsylvania over the weekend. In Bucks County, just outside Philadelphia, eleven cars were surrounded by fast-moving water that was five-feet deep.
Five people died after getting caught in flash flooding. One of the people who died was a mother. Her baby and toddler are still missing.
Over the last month, some parts of the Northeast have seen triple their average rainfall.
“This is possibly our new normal,” Gov. Kathy Hochul (D-NY) said Sunday, July 16. “This is the kind of weather that even what should normally be a beautiful beach going Sunday in July can turn into a devastating catastrophe because of mother nature.”
Suspect in Georgia mass shooting killed
A mass shooting in Georgia ended with four people killed and the suspected gunman dead following a shootout with police. Authorities say officers were able to track down 40-year-old Andre L. Longmore Sunday, one day after the deadly rampage.
Three officers were wounded during the exchange of gunfire. The injured officers are expected to recover.
The mass shooting took place in the community of Hampton, about 40 miles south of Atlanta. The names of the victims have not been released. A motive for the shooting remains under investigation.
AAA pulls back Florida coverage amid hurricane season
Right in the midst of hurricane season, some Florida residents have been dropped from their insurance companies. Big-name insurance companies like AIG, All State and State Farm have stopped taking on new customers in certain high-risk states like Florida and California.
Last week, Farmers Insurance announced it was pulling out of the Sunshine State. Days later, AAA said they were following suit by not renewing home or auto insurance policies for some of its Florida residents.
More trouble at Twitter
In a reply responding to business advice, Twitter owner Elon Musk revealed that the social media company is losing cash because of a 50% drop in advertising, as well as a heavy debt load. Musk added that Twitter needs to reach a positive cash flow before the company has “the luxury of anything else.”
Musk, who acquired Twitter last fall in a $44 billion deal, stepped down as the company’s CEO in May. Earlier in July, Twitter got some new competition in the form of Meta’s platform called Threads.
In its first week, Threads reached 100 million downloads. Twitter responded by threatening legal action against Meta.
Farmers Insurance limits home insurance policies in California
Farmers Insurance announced it would be the latest insurance company to limit its home insurance policies in California. The company is now limited to 7,000 new homeowners insurance policies per month for the entire state.
The announcement comes amid rising home insurance costs, an uncertain regulatory environment and a volatile natural environment. Farmers joins State Farm and Allstate as companies looking to limit their risk exposure.
“With record-breaking inflation, severe weather events, and reconstruction costs continuing to climb, we are focused on serving our customers while effectively managing our business,” a spokesperson for Farmers told ABC10 last week. “Effective July 3, Farmers will limit new homeowners insurance policies in California to a level consistent with the volume we projected to write each month before recent market changes.”
“While both State Farm and Allstate made a business decision to put a temporary pause on new homeowners policies in our state, current customers will not lose their insurance, and both State Farm and Allstate continue to write auto insurance,” California Deputy Insurance Commissioner Michael Soller told ABC10. “While the Department of Insurance cannot do anything about rising costs of repairs, materials, and rebuilding, we are not powerless.”
The decisions from State Farm and Allstate sent many people looking for new homeowners insurance policies flocking to Farmers. The decision from Farmers to cap the number of home insurance policies in California is expected to further raise the price.
“About two years ago, (my premium) doubled. I think it went from about three to six,” Oakland Hill homeowner Suki Dennis said, adding that she now pays close to $7,000 a year. “It’s a lot of money for somebody that’s never had a claim on anything.”
Ukraine NATO membership on agenda at summit: July 10 rundown
President Joe Biden is set to discuss Ukraine’s potential NATO membership with world leaders at the annual NATO summit this week, and the FDA may take a second-look at a popular energy drink on the market. These stories and more highlight the rundown for Monday, July 10, 2023.
Biden to meet with King Charles ahead of NATO summit
President Biden arrived in Europe for a series of meetings this week, including the annual NATO summit in Lithuania. Ukraine has been heavily lobbying to gain membership into NATO, but ahead of the summit, Biden said it would be premature to allow Ukraine to join.
Biden’s first stop in Europe is England, where he will meet with King Charles III for the first time since his coronation. They are expected to discuss the war in Ukraine.
Biden’s final stop will be in Finland, which joined NATO earlier this year. In addition to Ukraine’s NATO membership, Biden will also be in discussions regarding Sweden joining the alliance at the summit.
Also on the table, Biden’s decision to send cluster munitions to Ukraine. It’s a move that has been scrutinized because of the threat to civilians. The weapon has been banned by more than 100 countries.
For more on why this weapon is so controversial, read our in-depth report here.
U.S. drones used to kill ISIS leader
The three U.S. drones Russia was accused of harassing over Syria last week were the same drones the U.S. used to carry out an airstrike that killed a top Islamic-State group-leader on Friday, June 7. Usamah al-Muhajir was killed while he was riding a motorcycle in northwestern Syria in an area where the U.S. has carried out other strikes against terrorist leaders.
Appeals court overturns hold on TN gender-affirming care ban
A Tennessee law that bans doctors from providing puberty-blockers or other gender-affirming care for minors can now go into effect immediately. A U.S. appeals court voted 2 to 1 to reverse a lower court’s decision that had blocked the law from going into place while it was being challenged.
The law is part of a wider effort by Republican states looking to ban medical procedures that alter a child’s gender assigned at birth. Federal judges have blocked five laws similar to Tennessee’s from taking effect. Those judges found the laws violated the constitution’s guarantee of equal protection.
Intense flooding disrupts the South, Northeast
Intense storms swept across the U.S. over the weekend. Flash flooding and life-saving water rescues were reported in Oklahoma after heavy rains poured down.
In Orange County, New York, rushing flood waters turned roadways into rushing rapids, and a woman was killed after being swept away. Nearly a foot of rain fell, prompting a state of emergency.
In Norfolk, Connecticut, the rain washed away portions of a bridge. And in Reading, Pennsylvania, drivers on a major highway were left stranded in flood waters as an underpass became impassable.
Farmers Insurance limits home policies in California
Farmers Insurance has announced it will limit new home insurance policies in the state of California. The announcement makes Farmers the latest insurance company to do so due to the high likelihood of wildfires and severe weather events in the state.
State Farm announced last month it would stop writing new policies in California and Allstate made the same decision in late 2022. For many Californians, their home insurance policies have skyrocketed in price within the past few years, or they’re being dropped by their insurance companies completely.
Schumer calls on FDA to look into Prime Energy
Senate Majority Leader Chuck Schumer (D-NY) has called on the FDA to look into PRIME, an energy drink brand founded by famous influencers Logan Paul and KSI. PRIME’s launch in 2022 was an immediate success among the duo’s millions of predominantly younger followers.
What Sen. Schumer is trying to bring attention to is what’s in the drinks, specifically caffeine. While advertising itself as sugar-free and vegan, PRIME energy drinks contain 200 milligrams of caffeine per 12 ounces. That’s equal to six cans of Coke or nearly two Red Bulls.
The high caffeine content has led to bans from some schools in the United Kingdom and Australia. Pediatricians have warned of an increased risk of heart problems, anxiety and digestive issues in kids.
Representatives for PRIME have defended the drink, saying it’s clearly labeled as not recommended for children under 18. They added that PRIME also sells a sports drink, PRIME Hydration, that has no caffeine at all.
