Is State Farm now an ESG company?

Will those states like mine have to stop investing pension funds in State Farm?

State Farm is stopping the sale of new home-insurance policies in California effective Saturday, because of wildfire risk and rapid inflation in construction costs.

The move by one of California’s biggest insurers is a blow to the state’s efforts for years to maintain a vibrant market for homeowners in the wildfire-prone state. Nationally, inflation has been a serious problem for home and car insurers since last year, and many have posted underwriting losses as they continue to seek regulatory approvals for rate increases that they say they need for catching up with the surging costs.

Like a good neighbor, we’re there … when it’s convenient.


The article says they are continuing present policies but not taking on new ones. Since they are losing money on the policies they can’t make it up on volume.

The first rule of holes: stop digging.



Allowing housing to be built in the lower elevations of the California mountains, amidst long time (at least a century) of steadily dessicating forests during the past 50 years has been one of the cruelest and stupidest policies imaginable. The insurance companies were idiots to not raise alarms long ago.

I hope to god we pass laws and create very clear policies nationally that chart a smart and very limited course for bailing out idiot insurance companies, states, localities, and homeowners who have mostly brought this on themselves, both as to sea level rise and forest dessication.

I expect a lot of insurance policy income is now going to “protected free speech” that used to be considered to be bribes.

david fb


News reports also say rate increases must be approved by the state and have been delayed. This forces the insurance industry to sell at a loss.

High inflation, high construction costs, and recent rise in claims make California a difficult market for property insurance. Will other companies flee the state?

Same seems to be happening in Florida. News reported concerns about Louisiana.

When push comes to shove, what happens? Regulations are changed letting rates rise faster? States take over insurance coverage?

Can you get a mortgage on uninsured property?



You’ve asked the key questions.

The Dutch culture provides the crystal clear counter example. They only exist because EVERYTHING was subordinated to communally preserving their perilous but rich homeland.

Can we learn?

david fb


Rapid growth of the US wildland-urban interface raises wildfire risk
Radeloff et al.
When houses are built close to forests or other types of natural vegetation, they pose two problems related to wildfires. First, there will be more wildfires due to human ignitions. Second, wildfires that occur will pose a greater risk to lives and homes, they will be hard to fight, and letting natural fires burn becomes impossible. We examined the number of houses that have been built since 1990 in the United States in or near natural vegetation, in an area known as the wildland-urban interface (WUI), and found that a large number of houses have been built there. Approximately one in three houses and one in ten hectares are now in the WUI. These WUI growth trends will exacerbate wildfire problems in the future.



And insurance companies will become more selective about which properties they will insure. And if state allows at what rate.

If state will not allow they leave the state. Or if allowed some properties become prohibitively expensive to insure. Only the wealthy or those who don’t need a mortgage can live in risky but scenic places.

What is the alternative?


I think you covered them all. We can’t escape the consequences of climate change. For the most part, we humans have chosen adaptation to climate change rather than preemptive mitigation. Well, the time has come to start adapting. A growing number of US locations will in the no too distant future carry too much risk to make building permanent structures economically viable. This will be offset somewhat as locations near the poles become more temperate, but that doesn’t help Americans who don’t live in Alaska all that much.

So one of the first adaptations will be taxpayers subsidizing property insurance risks. In fact, it is already happening with Florida leading the way.


Wait until the US migrants can’t get into Canada…


Can’t figure out ESG ratings other than they are essentially meaningless. My brokerage posts ESG scores on stocks, so out of curiosity, looked up a leading renewable energy utility - 1. Looked up an integrated oil drilling/gasoline producer - 8. (scale 1-10 with 10 being best).

I also read an article a few weeks ago, high rated ESG companies lag the S&P 500, so it has that going for it.

1 Like