In the face of California’s posturing environmentalism, NIMBYism and civic rot, insurers have dropped fire insurance coverage for over 350,000 customers in the state.
There was a moment in the saving of GEICO back in the 1970s– under an aggressively expansionist management, it had taken on foolish risks and become badly under-reserved– when the new CEO met with the chief insurance regulator of New Jersey and explained that they had to have a rate increase. The regulator was a crusty, arrogant old man. He refused to allow it. The CEO took GEICO’s license to offer insurance in New Jersey out of his pocket and threw on the astonished regulator’s desk, and walked out. He immediately sent telegrams to every GEICO customer in NJ, canceling their insurance, before the regulator could go to court to stop him. They got their increase.
High-handed behavior is one of those rare things that is both easy to criticize and easy to admire. Often, though, beyond analysis, it is as necessary as a fastball is to a change-up. It shows you weren’t bluffing. In this case, it shows they won’t engage in business under conditions that have become unprofitable, and won’t allow politicians the cover of a delay that allows them to obscure the connection between bad, if popular, policy and a lack of business.