Cal Fair boogeyman

California Fair insurance. The very words strike fear into the hearts and minds of men and women everywhere. Or at least the men and women that are homeowners in fire-prone areas. It should also strike fear into renters everywhere, because as home costs go up, so do rents eventually. Those areas subject to rent control probably have landlords quivering even more. With temperatures apparently continuing to rise globally, the risk of wildfires will rise with them. Cal Fair, as it is commonly called (CFP for short), has its issues. As a Cal Fair agent, I know all too well the hiccups at CFP. Switching to a new platform on their website, called Duck Creek, hasn't made it any easier. Many agents have a different name for it, but this is a family show, so I won't go into that here. As an agent, I have seen misnamed subject lines in emails, changes to policies that take forever, and policies cancelled with the homeowners claiming no renewal notice was received. If you can imagine it, it's more than likely something similar has happened to make homeowners and agents throw up their hands in frustration. Don't get me wrong. CFP personnel have their hands full. Multiple wildfires have obliterated entire towns. Claims are coming in from everywhere, and all the while, people cuss the very agency that is trying to help them. Commonly referred to as the California Unfair Plan (CUP, LOL), in many cases they are the only ones that are willing to insure many homeowners, just because of the fact no other insurance company wants to undertake the risk. People think the premiums are high and going higher. "High" is relative while "higher" is certainly true. Not only are wildfires continuing to burn through houses in various spots in the country, the cost of home repair or replacement is going along for the ride with the inflation problem. Indeed, CFP has warned it may be on the verge of insolvency more than one time. Quoted as saying, "We are one event away from a large assessment," the head of the CFP, Victoria Roach, March 2024, hinted things were seriously in the red zone as to CFP finances. The "large assessment" she mentioned likely means bailout. Or maybe even a "bail in." Bailout means Uncle Sam steps up. Bail in usually means you do. The assessment part of that statement, coupled with the bail in part, could mean homeowners, or non- homeowners, or both, could simply be sent a bill like a tax bill, which means one has to pay it. WHA? I can hear the wailing now. I am sure most of you would opt for the bailout option, not wanting to pony up your hard-earned cash for something you may or may not even use, but anything is possible. Since the amounts needed are so large due to all the wildfire events and the rising cost to make homeowners whole again, a world on fire, coupled with our inflationary conflagration, could certainly lead to drastic measures. Although the wildfire reality is currently only the problem of CFP and the homeowner, at some point it may become everyone's problem. And everyone may be asked to pay for it. Crazier things have happened. This article expresses the opinion of Marc Cuniberti and is not meant as investment advice, or a recommendation to buy or sell any securities, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Mr. Cuniberti holds a BA in Economics with honors, 1979, and California Insurance License #0L34249. His insurance agency is BAP INC. insurance services. Email: news@moneymanagementradio.com