News
State Farm Withdraws Home Insurance Coverage for Bel-Air and Pacific Palisades Residents
State Farm’s recent decision to not renew home insurance policies for thousands of Californians, particularly those in Los Angeles County, has sent shockwaves through upscale neighborhoods like Bel-Air and Pacific Palisades. This move by the largest home insurance provider in California is adding financial uncertainty to homeowners who are already facing high costs and wildfire risks.
According to State Farm’s filings with the Department of Insurance, many residents in West Los Angeles and areas near the Santa Monica Mountains are set to lose their coverage. For homeowners in these affluent neighborhoods, the loss of insurance could have serious consequences, especially for older homeowners or those with lower incomes who may have purchased their homes when prices were more affordable.
The impact of State Farm’s decision is significant, affecting not only individual homeowners but also the broader insurance market in California. The company announced that it would be dropping a total of 72,000 property policies across the state, with about 30,000 of them being home insurance policies.
In a letter to Insurance Commissioner Ricardo Lara, State Farm President Denise Hardin explained that recent rate hikes approved by the Department of Insurance were not enough to bolster the company’s financial stability. As a result, State Farm had to reduce its exposure in order to align with its capital reserves, a move that will have far-reaching consequences for policyholders and independent agents.
The letter included a list of ZIP codes and the number of homeowners who would be impacted by the non-renewals. In neighborhoods like Pacific Palisades, Brentwood, Woodland Hills, and Bel-Air, a significant percentage of policyholders will lose their coverage this summer.
Community leaders like Thelma Waxman of the Brentwood Homeowners Association expressed concern over the situation, emphasizing the importance of finding alternative insurance coverage. Waxman noted that discussions about insurance non-renewals have become a common topic among association members, reflecting the anxiety and uncertainty felt by many residents.
As homeowners grapple with the prospect of losing their insurance, State Assemblywoman Jacqui Irwin has raised concerns about the broader implications of the insurance crisis. She hopes that regulatory changes can encourage insurers to resume writing policies for California properties.
Meanwhile, the state’s FAIR Plan, designed as a last resort for property owners unable to obtain traditional coverage, is facing increased enrollment and financial strain. This highlights the urgency of addressing the underlying issues contributing to the insurance crisis in California.
Insurance Commissioner Ricardo Lara has proposed new rules aimed at stabilizing the market and providing coverage for more homes in high-risk areas. While these proposals have garnered support from industry groups, concerns remain about the potential impact on consumers.
In response to the crisis, State Farm has pledged to work with state officials to find solutions and improve the overall insurance landscape. The company’s commitment to collaborating with regulators and stakeholders underscores the complexity of the challenges facing California’s insurance market.
News
Is now the right time to invest in gold as prices have cooled?
The price of gold has climbed to record highs recently and has remained strong through much of April. And, that growth continued until the precious metal traded at around $2,390 per ounce on April 19, 2024. But since, growth in the price of the precious metal has cooled, with gold’s price now hovering around $2,300 per ounce.
This lull in gold’s price may represent an investment opportunity.
In general, investing is centered around buying assets when prices are low and selling them when prices are high – generating a profit on the difference between the two. So, considering the declines in gold’s price over the past few days, now may be the time to make your investment. But is buying gold during this lull in prices really a good idea?
Compare your gold investment options among leading brokers now.
Gold prices have cooled. Should you buy in now?
With gold’s price down from recent highs, you may be wondering if now is the right time to buy in. There are several reasons the dip in gold’s price may represent an opportunity to buy. Here are some of the biggest:
Prices may rise again
If looking at a gold price chart shows anything for certain, it shows that changes in the overall growth of the medal come in fits and spurts. Periods of price growth are typically followed by periods of declines and vice versa.
But with inflation rising in recent months – and with gold’s reputation as a safe-haven asset that can hedge against inflation – it only makes sense that the price of the precious metal will eventually start to head up again in the future. While attempting to time that directional change may be tricky, buying the precious metal while the price is down gives you the opportunity to take advantage of any upward movement that may be ahead.
Add gold to your portfolio now before prices have a chance to rise.
You may be able to make a quick profit
Gold isn’t known as an asset in which you can earn a quick return, but in today’s market, that may be the case. Don’t forget that in January, gold was trading at just $2,000 per ounce. And, by mid-April, the commodity’s price had climbed to around $2,400 per ounce. That’s about 20% growth in a matter of months, much of which happened since March 1 – an impressive climb for any investment asset.
Perhaps more importantly, gold’s price growth through the beginning of 2024 shows that the commodity doesn’t have to be a buy and hold style investment that you keep in a safety deposit box or precious metal depository for years to come. There’s also the possibility that the commodity’s price could climb further ahead, making it a compelling way to potentially generate a quick profit.
There are other benefits of investing in gold
There are other benefits of investing in gold that have little to do with the price growth seen thus far in 2024 – or the lull in prices seen over the past couple of days. Those benefits include:
- Inflation protection: Gold has long been considered an inflation hedge, and for good reason. When inflation drives the prices of consumer goods and services up – and the value of the dollar down – gold’s price tends to rise. So, it could be used to maintain the value of your portfolio during inflationary economic conditions. That’s important in today’s economic environment as stubborn inflation continues to weigh on the value of the dollar.
- Portfolio diversification: Gold’s price doesn’t always move in the same pattern that bonds or stocks do. So, mixing a reasonable amount of gold into your portfolio (up to 10% of your portfolio assets) as a diversifier could protect you from losses should one or more of your traditional portfolio assets fall in value. “If you have less than 5% – 10% of your net worth in commodities & FX (forex), you should absolutely consider adding exposure to gold and other precious metals,” says Vijay Marolia, money manager and managing partner at the wealth management firm, Regal Point Capital.
The bottom line
Gold’s price has fallen from recent highs – which may represent an opportunity to tap into growth ahead. However, gold isn’t simply a “buy while it’s low and sell while it’s a high” kind of investment opportunity. The commodity can also protect your portfolio from the stubborn inflation we’ve seen thus far in 2024 while acting as a diversification tool that could increase your risk-adjusted portfolio returns. So, consider adding gold to your portfolio today while it has the potential to grow in value.
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Is now the right time to invest in gold as prices have cooled?