A Great Fire! Will State Farm Sink Like the Titanic in California?!

A Shadow of the Past is Growing

Hmph it seems the long arm of fate or perhaps just plain ill fortune has reached the shores of California. I Gandalf find myself penning a missive on the rather dire situation brewing within the Californian insurance market specifically concerning a company named State Farm. News has reached my ears carried on the west wind of their plea for an emergency rate increase. Seems these modern day hobbits homeowners as they are called face the looming threat of financial ruin all thanks to a rather nasty blaze in Los Angeles. As I recall 'Not all those who wander are lost,' but many homeowners are if State Farm can't keep afloat.

Like the Titanic You Say?

An attorney for the Department of Insurance has compared State Farm to the Titanic you say? An iceberg in sight! Blast and bother! A grim analogy indeed. And I thought battling Balrogs was stressful. This attorney Nikki McKennedy warns of 3 million souls flung into the water without lifeboats. This is no mere dragon's hoard we're discussing; this is the security of many homes. One does not simply 'walk' away from such a predicament. It appears the fires of Los Angeles have scorched more than just the landscape.

The Numbers the Horrible Numbers!

The numbers oh the numbers! They swirl about me like the mists of the Misty Mountains. Billions lost claims filed in the thousands and a market deemed 'unsustainable' by some economist named David Appel. Even my old friend Elrond with his mastery of healing and lore would balk at this mess. State Farm it seems has requested a 17% increase after initially asking for 22% they need to be careful about the requests they make lest they become like Sauron always wanting more...

The Commissioner's Dilemma

Now we come to the elected Insurance Commissioner Ricardo Lara. A tricky position he holds. He's been hesitant to approve these rate hikes. He is stuck between a rock and a hard place. Balancing the needs of the company with the livelihoods of the people. It reminds me of Frodo carrying the Ring a heavy burden with no easy answers. It's a dangerous business Frodo going out your door. You step onto the road and if you don't keep your feet there's no knowing where you might be swept off to.

To Approve or Not to Approve That is the Question!

And now Consumer Watchdog rears its head skeptical of State Farm's pleas. 'Not justified!' they cry. 'Inconsistent!' Their lead attorney William Pletcher seems to be channeling his inner Gimli axe in hand ready to chop down any injustice. However the California Department of Insurance actually supports the rate increase request. It is the classic battle between good and evil. In any case State Farm has also agreed to seek $400 million in funds from its parent company if the rate increases are approved. Even the White Council had less trouble agreeing on a course of action!

A glimmer of Hope?

However there is a glimmer of hope. The state has crafted a 'Sustainable Insurance Strategy,' a plan to use fancy modeling and consider the cost of reinsurance. This Janet Ruiz of the Insurance Information Institute claims this is crucial. Perhaps this is the equivalent of the Eagles arriving at the last moment to save the day? Let us hope so. For as I've often said 'Even the smallest person can change the course of the future.' I pray that California finds a solution to its problems before they come crashing down like the walls of Minas Tirith.