More competition or higher rates? [Video]

California is considering whether to allow insurance companies to use computer models to justify their rate hikes. 

The goal is to try and stop these companies from leaving the state entirely. 

Since you can’t finance a home without insurance, California finds itself as a growing insurance desert choking off a big part of the economy. Though, activity in Sacramento, aimed at freeing the market up is underway, it will be a fight and consumers may not like the ultimate results.

By their own conduct, raising rates, canceling policies and refusing to sell new policies, insurers have laid down the gauntlet, “Change California’s insurance laws or we’re outta here.” The California Insurance Commissioner says he’s responding to the challenges by insurers to create calls reliable, competitive and available homeowners’ insurance by the end of this year.

Key to that, adopting insurance industry-created algorithms that will allow insurers to predict the fire risk, down to individual homes. From that they will set individual rates, based on …