▶️ USPS: Stop mailing checks from your mailbox

(KDKA) — A surge in crimes targeting the U.S. Postal Service has some experts warning Americans against sending their checks through the mail.

The USPS last month cautioned that it has seen an increase in attacks on letter carriers and mail fraud incidents, with 305 mail carriers robbed in the first half of fiscal year 2023, on pace to exceed the previous year’s 412 robberies. At the same time, fraudsters are targeting mailboxes, either stealing letters directly from residents’ homes or from the blue USPS collection boxes, the Postal Service said.

The rise in crime targeting postal carriers and mailboxes heightens the risk that mailed checks could be stolen, as has been documented in incidents across the nation. For instance, a rash of thefts from blue collection boxes in Milwaukee led to the break up last month of a criminal ring. The suspects allegedly used stolen “arrow keys,” or a universal USPS key that opens mail collection boxes, to pilfer mail, including more than 900 stolen checks, according to a criminal complaint.

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The theft issues have prompted the USPS to advise that Americans avoid depositing mail in blue collection boxes or leaving it in their own mailboxes for a carrier to pick up. Instead, the agency is now recommending that patrons come inside their local post office to securely send mail.

Experts concur with the advisory to only mail checks at the post office.

“If you are choosing to mail a check, it is always recommended that you use a secure mail drop such as inside a post office versus an unsecured public-facing mailbox,” Caitlin Driscoll of the Better Business Bureau told CBS Pittsburgh.

In an email to CBS MoneyWatch, the U.S. Postal Inspection Service said mail theft is increasing as part of a broader national trend of “increased crime patterns.”

The U.S. Postal Inspection Service reported roughly 300,000 complaints about mail theft in 2021, more than double the prior year’s total. In some cases, criminals are attacking mail carriers and stealing their deliveries. In others, fraudsters are using arrow keys to gain access to postal boxes to take letters, checks and other valuables.

A 2020 report from the postal service’s Office of Inspector General found that the agency didn’t know how many arrow keys were in circulation or how many had been stolen, raising concerns about the security of collection boxes.

The U.S. Postal Service said that people should avoid allowing either incoming or outgoing mail from sitting in their mailboxes for too long.

“You can significantly reduce the chance of being victimized by simply removing your mail from your mailbox every day,” the agency said in a statement.

The agency also recommends that people post mail inside their local post office or at their workplace; alternatively, they can hand their mail directly to a mail carrier. However, the USPS itself hasn’t issued any specific guidance on mailing checks, the U.S. Postal Inspection Service told CBS MoneyWatch.

“Our recommendations are provided as an extra precaution for those who feel more comfortable taking their mail to the Postal Office,” the agency said.

What could happen if my check is stolen?

Thieves use a technique called “check washing” to scam you out of your money. That involves using chemicals that erase your writing on the check, such as the name of the recipient and the amount of the check. Once the payment is blank, they can fill in new information, including the amount.

In one case, a man mailed a $42 check to pay a phone bill and was shocked when it was cashed for $7,000, paid out to someone he’d never heard of. In another case, nearly 60 individuals last year were arrested in Southern California on charges of committing more than $5 million in check fraud against 750 people.

How many people still use checks?

It’s true that check usage is declining, but Americans still wrote 3.4 billion checks in 2022. That’s down from 19 billion checks in 1990, but it still gives criminals plenty of opportunity for fraud.

Hyundai, Kia recall nearly 3.4 million vehicles due to fire risk

DETROIT (AP) — Hyundai and Kia are recalling nearly 3.4 million vehicles in the U.S. and telling owners to park them outside due to the risk of engine compartment fires.

The recalls cover multiple car and SUV models from the 2010 through 2019 model years including Hyundai’s Santa Fe SUV and Kia’s Sorrento SUV.

Documents posted Wednesday by the U.S. National Highway Traffic Safety Administration say the anti-lock brake control module can leak fluid and cause an electrical short, which can touch off a fire while the vehicles are parked or being driven.

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The automakers are advising owners to park outdoors and away from structures until repairs are done.

Dealers will replace the anti-lock brake fuse at no cost to owners. Kia says in documents that it will send notification letters to owners starting Nov. 14. For Hyundai the date is Nov. 21.

Hyundai reported 21 fires in the affected vehicles in the U.S., and another 22 “thermal incidents” including smoke, burning and melting of parts, the documents say. Kia reported 10 fires and melting incidents.

Hyundai said in a statement that owners can continue to drive the vehicles and that no crashes or injuries have been reported. The automaker said it was doing the recall to ensure safety of its customers.

The company said an O-ring in the antilock brake motor shaft can lose sealing strength over time due to the presence of moisture, dirt and dissolved metals in the brake fluid, causing leaks. The new fuse limits the operating current of the brake module, the statement said.

In a statement, Kia said an engine compartment fire could happen in the area of the brake control unit due to an electrical short that results in excessive current. The statement says the exact cause of the short circuit is unknown and that there have been no crashes or injuries.

Michael Brooks, executive director of the nonprofit Center for Auto Safety, questioned why the companies aren’t fixing the leak problem and why they are waiting so long to send letters to owners.

The remedy is replacing one fuse with another, but brake fluid can still leak, potentially causing a safety problem, Brooks said.

“Why not fix the problem?” he asked. “What you’re not doing here is fixing the O-ring and the leak that’s causing the problem in the first place. You’re combatting a symptom or part of the problem without actually fixing the underlying design issue.”

Brooks also questioned why NHTSA is allowing the companies to only replace a fuse, and why owners aren’t being sent interim letters immediately warning them of a serious problem. “You would think that you should be notifying those owners right now that they shouldn’t be parking in their garages or their house could catch fire,” he said.

Statements from both companies don’t address why the fluid leaks aren’t being repaired or why it will take about two months to notify owners by letter. Spokespeople for both companies said they would check into the questions.

NHTSA said that under the federal motor vehicle safety act, automakers can choose the remedy to fix a defect. The agency said it will monitor the effectiveness of the repairs and open an investigation if warranted.

In addition, automakers have 60 days to notify owners of recalled vehicles by letter, but often the mailings can happen sooner, the agency said.

NHTSA also issued a statement Wednesday warning owners to park the vehicles outdoors until repairs are made.

Affected Kia models include the 2010 through 2019 Borrego, the 2014 to 2016 Cadenza, 2010 through 2013 Forte, Forte Koup and Sportage, the 2015 to 2018 K900, the 2011 to 2015 Optima, the 2011 to 2013 Optima Hybrid and Soul, the 2012 to 2017 Rio, the 2011 to 2014 Sorento, and the 2010 to 2011 Rondo.

Hyundai models covered by the recall include the 2011 to 2015 Elantra, Genesis Coupe, and Sonata Hybrid, the 2012 to 2015 Accent, Azera, and Veloster, the 2013 to 2015 Elantra Coupe and Santa Fe, the 2014 to 2015 Equus, the 2010 to 2012 Veracruz, the 2010 to 2013 Tucson, the 2015 Tucson Fuel Cell, and the 2013 Santa Fe Sport.

Owners can go to www.nhtsa.gov/recalls and key in their 17-digit vehicle identification number to see if their vehicle is affected.

Hyundai and Kia have been plagued by fire problems since 2015. The Center for Auto Safety successfully petitioned U.S. regulators to seek recalls in 2018 and says on its website that the automakers have recalled more than 9.2 million vehicles for fires and engine problems, not including the recalls announced Wednesday. More than two dozen of the recalls involved over 20 models from the 2006 through 2021 model years.

In addition, NHTSA is investigating 3 million vehicles made by the automakers from the 2011 through 2016 model years. NHTSA says it’s received 161 complaints of engine fires, some of which occurred in vehicles that had already been recalled.

In June 2018, NHTSA said it had received owner complaints of more than 3,100 fires, 103 injuries and one death. Hyundai and Kia were fined by NHTSA in 2020 for moving too slowly to recall vehicles that were prone to engine failures.

▶️ Oregon 2024 maximum rent increase is 10%. New law kept it from going higher.

The maximum rent increase that will be allowed in Oregon in 2024 will be 10%. And it could have been higher if not for a new law that was passed earlier this year.

The Oregon Department of Administrative Services announced the 2024 rent increase cap on Tuesday.

The maximum allowable increase in rent is 7% plus the Consumer Price Index (CPI) — a measure of inflation — for all urban consumers in the west region as calculated by the Bureau of Labor Statistics.

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This year, the CPI is 5.6%. Add that to the 7% number and that means the maximum allowable increase could have been 12.6%.

But, under Senate Bill 611 passed earlier this year, the maximum allowable increase is the 7%-plus-CPI combination or 10% — whichever is lower.

That means someone paying $2,000 per month in rent in 2023 could pay $2,200 per month in 2024, if the landlord chooses to go with the maximum increase.

The law also says the landlord may not increase the rent during the first year of tenancy. The landlord must also give 90 days notice before increasing rent after the first year of tenancy and can only increase the rent once in a 12-month period.

As inflation spiked in 2022, the maximum rent increase was 14.6% in 2023. SB 611 which took effect on July 6. Therefore, increases issued after that date were bound by the new 10% cap.

The maximum annual increase has been above 10% six times since 2000, according to state data. It’s been at 9% or above in 17 of the previous 24 years.

Target to close 3 Portland, 2 Seattle stores citing theft, safety

NEW YORK (AP) — Target will close nine stores in four states, including one in East Harlem, New York and three in San Francisco, saying that theft and organized retail crime have threatened the safety of its workers and customers.

The closings, which will be effective Oct. 21, also include three stores in Portland, Oregon, and two in Seattle. Target said that it still will have a combined 150 stores open in the markets where the closures are taking place. Target will offer affected workers the opportunity to transfer to other stores.

Target described the decision as “difficult.”

“We know that our stores serve an important role in their communities, but we can only be successful if the working and shopping environment is safe for all,” Target said in a statement on Tuesday.

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Before making the decision, Target said it had invested heavily in strategies to prevent and stop theft such as adding more security team workers, using third-party guard services and installing theft deterrent tools like locking up merchandise. It also has trained store leaders and security team members to protect themselves and de-escalate potential safety issues. But it noted that despite those efforts, it continued to face “fundamental challenges” to operate the stores safely — and the business performance at these locations was unsustainable.

While the store closings account for just a fraction of the 1,900 stores Target operates nationwide, the move is significant. It underscores the big challenges that retailers like Target face in reducing theft in stores as they wrestle with protecting their workers and customers while trying to serve the community, particularly low-income and minority groups who rely on the local stores for necessities.

For example, the Target store in East Harlem is located in a heavily Hispanic area, and residents have few choices to buy good quality healthy foods. In San Francisco, one of the stores slated to close is located at 13th Street and Folsom under a busy overpass with homeless tents in a largely commercial neighborhood with auto shops. In Seattle, one of the stores is located on a busy avenue near the University of Washington.

Target CEO Brian Cornell has been one of a handful of retail CEOs flagging what they described as rising theft over the past year or so. Cornell had held steadfast he didn’t want to resort to closing stores even despite mounting losses. Target said in May that theft was cutting into its bottom line and it expected related losses could be $500 million more than last year, when losses from theft were estimated to be anywhere from $700 million to $800 million. So that means losses could top $1.2 billion this fiscal year.

Moreover, Cornell told analysts in August that violent incidents against workers at Target stores increased 120% for the first five months of the year compared with the same period a year ago.

“Our team continues to face an unacceptable amount of retail theft and organized retail crime,” Cornell told analysts. “Unfortunately, safety incidents associated with theft are moving in the wrong direction.”

The announcement also comes as Target is still reeling from being targeted for its LGBTQ+ support, in particular, its displays of Pride Month merchandise. In late May, ahead of Pride Month, Target pulled some items in particular regions and made other changes after encountering hostility from some customers who confronted workers and tipped over displays. Target said the moves were made to protect workers in the store.

It’s unclear how much money retailers broadly are losing due to organized retail crime — or if the problem has substantially increased. But the issue has received more notice in the past few years as high-profile smash-and-grab retail thefts and flash mob robberies have garnered national media attention. Over the past few quarters, an increasing number of retailers including Dick’s Sporting Goods and Ulta Beauty have been calling out rising theft, calling it a factor in shrinking profits.

The National Retail Federation, the nation’s largest retail trade group, said its latest security survey of roughly 177 retailers found that inventory loss — called shrink — clocked in at an average rate of 1.6 % last year, representing $112.1 billion in losses. That’s up from 1.4% the previous year.

The greatest portion of shrink — 65% — came from external theft, including products taken during organized shoplifting incidents, the trade group said Tuesday. More than two-thirds of respondents said they were seeing even more violence and aggression from perpetrators of organized retail crime compared with a year ago.

The NRF said that even though retailers continue to improve their loss-prevention measures, sometimes more drastic action must be taken. Nearly 30% of retailers surveyed reported being forced to close a specific store location, and 45% said they needed to reduce operating hours. Roughly 30% said they needed to change or reduce product selection in stores as a direct result of retail crime.

Late last year, Congress passed a bill, called the INFORM ACT, that seeks to combat sales of counterfeit goods and dangerous products by compelling online marketplaces to verify different types of information – including bank account, tax ID and contact details – for sellers who make at least 200 unique sales and earn a minimum of $5,000 in a given year.

Target said Tuesday that it’s making significant investments in cyber defense to combat retail theft and fraud and has teamed up with the U.S. Department of Homeland Security’s Homeland Security Investigations division to combat retail theft.

Amazon sued by Oregon, others over allegations it inflates online prices

The Federal Trade Commission and 17 state attorney generals, including Oregon’s, filed an antitrust lawsuit against Amazon on Tuesday. The allege the e-commerce behemoth uses its position in the marketplace to inflate prices on other platforms, overcharge sellers and stifle competition.

The lawsuit, filed in U.S. District Court for the Western District of Washington, is the result of a years-long investigation into Amazon’s businesses and one of the most significant legal challenges brought against the company in its nearly 30-year history.

According to a news release sent by the agency, the FTC and states that joined the lawsuit are asking the court to issue a permanent injunction court that they say would prohibit Amazon from engaging in its unlawful conduct and loosen its “monopolistic control to restore competition.”

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“The complaint sets forth detailed allegations noting how Amazon is now exploiting its monopoly power to enrich itself while raising prices and degrading service for the tens of millions of American families who shop on its platform and the hundreds of thousands of businesses that rely on Amazon to reach them,” FTC chairman Lina Khan said in a statement.

Many had wondered whether the agency would seek to a forced break-up of the retail giant, which is also dominant in cloud computing and has a growing presence in other sectors like groceries and health care. In a briefing with reporters, Khan dodged questions of whether that will happen.

“At this stage, the focus is more on liability,” she said.

The FTC said the states joining the suit include Connecticut, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Hampshire, New Mexico, Nevada, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island, and Wisconsin joined the Commission’s lawsuit. 

Central Oregon Daily News contributed to this report.

Amazon Prime Video to charge for ad-free watching, even for Prime members

Amazon Prime Video will include advertising during shows and movies starting early next year, joining other streaming services that have added different tiers of subscriptions.

Members of Amazon Prime can pay $2.99 per month in the U.S. to keep their service ad-free, the company said Friday.

Streaming services are in a heated tug-of-war over viewers and users are growing more adept at jumping in and out of those services, often depending on price. The platforms risk losing customers with price hikes, but they could lose them if they don’t generate new content that wins over users.

Disney will begin charging $13.99 a month in the U.S. for ad-free Disney+ in mid-October, 75% more than the ad-supported service. Netflix already charges $15.49 per month for its ad-free plan, more than twice the monthly subscription for Netflix with ads.

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Amazon said limited advertisements will be aired during shows and movies starting early next year so that it can “continue investing in compelling content and keep increasing that investment over a long period of time.”

Live events on Amazon Prime, like sports, already include advertising.

Ads in Prime Video content will start in the U.S., U.K., Germany, and Canada in early 2024, followed by France, Italy, Spain, Mexico, and Australia later in the year.

Amazon said that it’s not making changes to the price of Prime membership next year. It plans to announce pricing for ad-free programming for countries other than the U.S. at a later time.

For U.S. users, Amazon said it will send out an email to Prime members several weeks before ads are introduced into its programs with information on how to sign up for the ad-free option if they choose to do so.

Amazon’s Prime Video is part of a much bigger slate of perks that come with Amazon Prime membership. Members also get free shipping for goods bought on Amazon.com, groceries, online music and more.

In June Amazon was accused by the Federal Trade Commission for allegedly engaging in a yearslong effort to enroll consumers without consent into Amazon Prime and making it difficult for them to cancel their subscriptions. An Amazon spokesperson said at the time that the FTC’s claims were false.

Fed keeps rates unchanged and signals optimism about a potential ‘soft landing’

WASHINGTON (AP) — The Federal Reserve left its benchmark interest rate unchanged Wednesday for the second time in its past three meetings, a sign that it’s moderating its fight against inflation as price pressures have eased.

The Fed’s policymakers also signaled that they expect to raise rates once more this year and envision their key rate staying higher in 2024 than most analysts had expected.

But as their latest policy meeting ended, the 19 members of the Fed’s rate-setting committee conveyed growing optimism that they will manage to slow inflation to their 2% target without causing the deep recession that many economists had feared. It’s a hopeful scenario that economists call a “soft landing.”

In a set of new quarterly projections, the policymakers showed that they expect faster economic growth and lower unemployment this year and next year than they had foreseen just three months ago. Even with solid growth in sight, they also think inflation will continue to cool.

Those expectations suggest that Fed officials feel “they’re going to be able to do what it takes to achieve gradual disinflation without disruption to the labor market, or without triggering a meaningful recession,” said Subadra Rajappa, head of rates strategy at Societe Generale.

Since peaking at a year-over-year high of 9.1% in June 2022, consumer inflation in the United States has dropped to 3.7%. Speaking at a news conference Wednesday, Chair Jerome Powell cautioned that the Fed still wants further assurance from forthcoming economic data that inflation is on a sustainable path back to its target level. But he suggested that the Fed is getting closer to the end of its rate-hiking cycle and that a soft landing seems “plausible.”

“We’re fairly close, we think, to where we need to get,” Powell said. “A soft landing is a primary objective. … That’s what we’ve been trying to achieve all this time.”

The Fed’s latest decision kept its benchmark rate at about 5.4%, the result of the 11 rate increases it unleashed beginning in March 2022. Those rapid hikes, Powell said, now allow the central bank to take a more measured approach to its rate policy.

“We’re taking advantage of the fact that we moved quickly in the past,” he said, to manage rates “a little more carefully now as we sort of find our way to the right level of restriction that we need to get inflation back down to 2%.”

Fed officials expect to cut interest rates just twice next year, fewer than the four rate cuts they had forecast in June. They predict that their key short-term rate will still be 5.1% at the end of 2024 — higher than it was from the 2008-2009 Great Recession until May of this year.

Yet one reason they likely have reduced the number of expected rate cuts for 2024 is a positive one: They think a recession, which would require multiple rate cuts to aid the economy, is less likely to occur.

“What we have right now is what’s still a very strong labor market that’s coming back into balance,” Powell said. “We’re making progress on inflation. Growth is strong.”

Though Fed officials have projected one more rate hike this year, Powell appeared to hedge more than he typically does on whether that will prove necessary.

“At this stage, they don’t have as much certainty about that hike,” said Derek Tang, an economist at LHMeyer, a forecasting firm. “He did sound more equivocal.”

Treasury yields moved sharply higher Wednesday after the Fed issued a statement after its latest policy meeting and updated its economic projections.

In their new quarterly projections, the policymakers estimate that the economy will grow faster this year and next year than they had previously envisioned. They now foresee growth reaching 2.1% this year, up from a 1% forecast in June, and 1.5% next year, up from their previous 1.1% forecast.

Core inflation, which excludes volatile food and energy prices and is considered a good predictor of future trends, is now expected to fall to 3.7% by year’s end, better than the 3.9% forecast in June. Core inflation, under the Fed’s preferred measure, is now 4.2%. The policymakers expect it to drop to 2.6%, near their target, by the end of next year.

The approach to rate increases the Fed is now taking reflects an awareness that the risks to the economy of raising rates too high is growing. Previously, the officials had focused more on the risks of not doing enough to slow inflation.

In generating sharply higher interest rates throughout the economy, the Fed has sought to slow borrowing — for houses, cars, home renovations, business investment and the like — to help ease spending, moderate the pace of growth and curb inflation.

Though clear progress on inflation has been achieved, gas prices have lurched higher again, reaching a national average of $3.88 a gallon as of Tuesday. Oil prices have surged more than 12% in just the past month.

And the economy is still expanding at a solid pace as Americans, buoyed by steady job growth and pay raises, have kept spending. Both trends could keep inflation and the Fed’s interest rates high enough and long enough to weaken household and corporate spending and the economy as a whole.

While overall inflation has declined, the costs of some services — from auto insurance and car repairs to veterinary services and hair salons — are still climbing faster than they were before the pandemic. Still, most recent data is pointing in the direction the Fed wants to see: Inflation in June and July, excluding volatile food and energy prices, posted its two lowest monthly readings in nearly two years.

And signs have grown that the job market isn’t as robust as it had been, which helps keep a check on inflation. The pace of hiring has moderated. The number of unfilled openings fell sharply in June and July. And the number of Americans who have started seeking work has jumped. This has brought labor demand and supply into better balance and eased pressure on employers to raise pay to attract and keep workers – a trend that can lead them to raise prices to offset higher labor costs.

Some factors are threatening to re-ignite inflation, weaken the economy, or both. Rising oil prices, for example, are making gasoline steadily more expensive. Should that trend continue, it would worsen inflation and leave consumers with less money to spend. Even the so-far limited strike by the United Auto Workers union against the Big 3 U.S. automakers could eventually further inflate vehicle prices.

Homeowners face rising insurance rates as wildfires, storms become more common

NEW YORK (AP) — A growing number of Americans are finding it difficult to afford insurance on their homes, a problem only expected to worsen because insurers and lawmakers have underestimated the impact of climate change, a new report says.

A report from First Street Foundation released Wednesday says states such as California, Florida and Louisiana, which are prone to wildfires and damaging storms and flooding, are likely to see the most dramatic increases in premiums. But the fire that destroyed the Hawaiian community of Lahaina on Aug. 8, as well as the historic flooding that happened in Vermont and Maine in July, are examples of events that could drive up insurance costs for homeowners in other states.

“If you’re not worried, you’re not paying attention,” said California Sen. Bill Dodd, whose district includes the wine-country counties devastated by the LNU Complex fires in 2020.

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First Street estimates, factoring climate models into the financial risk of properties in its report, that roughly 39 million properties — roughly a quarter of all homes in the country — are being underpriced for the climate risk to insure those properties.

“Some places may be impacted very minimally, but other places could see massive increases in insurance premiums in the coming years,” said Jeremy Porter, head of climate implications at First Street and a co-author of the report.

First Street, a New York-based non-profit, has been a to-go researcher on the financial implications of climate change for years. Their research is used by Fannie Mae, Bank of America, the Treasury Department and others for understanding the potential risks to properties.

There are several signs that climate change is taking its toll on the insurance industry. The U.S. homeowner’s insurance industry has had three straight years of underwriting losses, according to credit rating agency AM Best. Losses for the first half of 2023 totaled $24.5 billion, which is roughly what was lost in all of 2022.

“(Climate change) is a problem that is already here,” said Todd Bevington, a managing director at the insurance broker VIU by HUB. In his 30 years of doing insurance, he said “I’ve never seen the market turn this quickly or significantly.”

Skyrocketing insurance costs are a serious concern for the small town of Paradise in Northern California, which was nearly wiped out by a deadly 2018 wildfire that killed 85 people.

Jen Goodlin moved back to her hometown from Colorado with her family in 2020, determined to help in the town’s recovery. They began building on a lot they had purchased, and moved into their new house in October 2022.

In July, she was shocked to receive notice that the family’s homeowner insurance premium would be $11,245 — up from $2,500.

“Our insurance agent said, ‘Just be thankful we didn’t drop you,’ and I said, ‘You did, you just dropped me,’” she said.

Goodlin, a former dental hygienist who is now executive director of the nonprofit Rebuild Paradise Foundation, said hundreds, if not thousands, of people are being hit by these rate hikes in a town being built with updated fire-safe building codes and little if any fuel to burn. She knows a homeowner whose premium is now $21,000 for a newly constructed home.

Record numbers of Americans are now insured through state-affiliated “insurers of last resort” like California’s FAIR Plan, or Louisiana or Florida’s Citizens property insurance companies. These programs were designed to insure properties where private insurance companies have refused to insure or the price for private insurance is too expensive.

Goodlin will soon be one of those homeowners. She said she’s in the process of transitioning to the FAIR Plan.

The number of homeowners covered by California’s FAIR Plan was 268,321 in 2021, almost double what it was five years before. That figure has almost certainly increased in the last two years, experts say. In Florida, Citizens Property Insurance Corp. now has 1.4 million homeowners’ policies in effect, nearly triple in five years.

In some cases, policymakers have bound the hands of insurance companies, leading to an underpricing of risk. For example, the most a California insurance company can raise a homeowner’s premium by law each year is 7% without involving a public hearing, a process that most insurers want to avoid. Those policies, along with the increased chance of catastrophic events, have led insurers like State Farm and Allstate to either pull out of the California market or pause underwriting new policies.

As a result, California’s FAIR plan, which was created 50 years ago as a temporary stopgap measure for those impacted by riots and brush fires in the 1960s, is now the only option available to homeowners in some ZIP codes.

“We’ve got to find a way to get insurers to get back into the market, to take people out of the FAIR Plan so that we can reduce the risk there,” Dodd said.

Dodd was one of the key lawmakers trying to negotiate a bill in the final weeks of the state’s legislative session to address the issue. But all sides failed to reach an agreement.

There are likely to be more insurance market failures in the future, Porter said, as more insurers simply refuse to underwrite policies in certain communities or go property by property. Comparisons to the National Flood Insurance Program, which is now $22.5 billion in debt, have become common.

Even the backstop programs are buckling under tremendous losses. Louisiana’s insurer of last resort, Citizens, raised its rates for 2023 by 63.1% statewide to cover higher costs.

This summer, reinsurance companies such as Swiss Re and Munich Re raised their property catastrophe reinsurance premiums in the U.S. by an average of 20% to 50%. Reinsurance brokerage firm Guy Carpenter & Co. said it was the highest increase for reinsurance rates since the year after Hurricane Katrina devastated New Orleans and the Gulf Coast.

“It’s a global problem. Virtually every geography is seeing a repricing of risk,” said Lara Mowery, global head of distribution at Guy Carpenter, in an interview.

Reinsurers step in to help cover losses resulting from a catastrophe, so regular insurance companies do not take on all of the risk. In one example of a typical reinsurance contract, a $20 million contract could require the insurance company to cover the first $10 million in claims and the reinsurer to pick up the other $10 million.

Mowery added that many reinsurance firms now have resources dedicated to studying the impact of climate change on how to price catastrophes.

There have been other factors impacting the insurance industry as well. Inflation has made the cost of repairing homes pricier and home prices remain near record levels. A labor shortage means getting damaged homes repaired may take longer, requiring insurers to pay for temporary housing for policyholders longer.

In short, an industry whose business model is calculating risk based on what happened in the past is increasingly unable to do so.

“You can no longer rely on 100 years of wildfire data to price risk when the unprecedented has happened,” Mowery said.

While the intensity of wildfires, floods and storms can vary from year to year, the trend lines in these models point to more wildfire activity as well as more intense storms, all likely to result in more catastrophic amounts of damage that insurance companies will have to cover.

Factoring in climate models and acres estimated to be burned, First Street estimates that by 2050, roughly 34,000 homes will burn down because of wildfires every year. That’s roughly the equivalent of losing the city of Asheville, N.C., every year.

Going forward, it may become more necessary for potential homebuyers to look at the cost of insuring the property they are looking at before locking in a mortgage rate, due to the potential for significant rate hikes in the future.

“It used to be homeowner’s insurance was an afterthought when you are looking at buying a property. Now you’ll really need to do your research into what risks there may be in that property in the coming years,” Bevington said.

Some American cheese slices recalled because wrappers could pose choking hazard

Kraft Heinz said Tuesday it’s recalling more than 83,000 cases of individually-wrapped Kraft Singles American processed cheese slices because part of the wrapper could stick to the slice and become a choking hazard.

The company, which is based in Chicago and Pittsburgh, said one of its wrapping machines developed a temporary issue that makes it possible for a thin strip of film to remain on the slice even after it’s been removed from the wrapper. The machine has since been fixed.

Kraft Heinz said it initiated the voluntary recall after it received several consumer complaints. In six cases, people said the issue caused gagging or choking, but no injuries or serious health issues have been reported, Kraft Heinz said.

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The recall affects 16-ounce Kraft Singles American Pasteurized Prepared Cheese Product with a “Best When Used By” date between Jan. 10, 2024, and Jan. 27, 2024. Also included in the recall are 3-pound multipacks of Kraft Singles American Pasteurized Prepared Cheese Product with a “Best When Used By” date between Jan. 9, 2024, and Jan. 13, 2024.

Consumers who bought those products should not consume them and should return them to the store where they were purchased for an exchange or a refund, Kraft Heinz said. Consumers can also contact Kraft Heinz at 1-800-280-8252 to see if a product is part of the recall and to receive reimbursement.

Here is the full release from Kraft Heinz:

Kraft Heinz is announcing a voluntary recall of approximately 83,800 cases of individually-wrapped Kraft Singles American processed cheese slices that were shipped to a limited number of customers.

The voluntary recall comes as a precaution after a temporary issue developed on one of our wrapping machines, making it possible that a thin strip of the individual film may remain on the slice after the wrapper has been removed. If the film sticks to the slice and is not removed, it could be unpleasant and potentially cause a gagging or choking hazard.

Only Kraft Singles American processed cheese slices with the case/package information below are affected. No other varieties or sizes are included in the recall.

The issue was discovered after we received several consumer complaints about finding the plastic stuck to a slice, including six complaints of consumers saying they choked or gagged in connection with the issue. No injuries or serious health issues have been reported.

Kraft Heinz has fixed the machine that wrapped the affected slices and all other processing machines have been thoroughly inspected.

Consumers who purchased these items should not consume them and can return them to the store where it was purchased for an exchange or refund. Consumers can contact Kraft Heinz from 9 a.m. to 6 p.m. Eastern Standard Time, Monday through Friday, at 1-800-280-8252 to see if a product is part of the recall and to receive reimbursement.

Kraft Heinz is committed to upholding the highest safety and quality standards and apologizes for this inconvenience.

Products included in the recall include 16 oz. Kraft Singles American Pasteurized Prepared Cheese Product with an individual package UPC of 0 2100061526 1 and a “Best When Used By” date of 10 JAN 24 through 27 JAN 24. Individual packages in this recall will contain an S and 72 in the Manufacturing code.

▶️ Need new winter gear? Skyliner Ski Swap coming up

For those gearing up for winter sports, the annual Skyliner Ski Swap is coming up.

The Mount Bachelor Sports and Education Foundation is hosting the event on October 14 at the Pavilion in Bend.

It’s an opportunity to swap out your winter gear and maybe make a few bucks.

If you want to participate, you need to register your gear online with MBSEF by October 9.

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Here is the full release by MBSEF:

The Mt. Bachelor Sports Education Foundation is excited to announce that the Annual Skyliner Ski Swap will be held on October 14th at the Pavilion (Ice Rink), 1001 SW Bradbury Way, Bend, OR 97702. This is the premier swap of the Northwest that includes both local consignors and local and regional retailers. Local consigners outfit the swap with used and new winter gear. Local and regional retailers supply the swap with everything from new skis and snowboards to boots and goggles at below wholesale pricing.

Public Sale Date: Saturday, October 14th 2023

Public Sale Times: 8:00 am – 5:00 pm

Registered Gear Check-In Times: Thursday, October 12th from 3:00 pm – 6:30 pm Friday, October 13th from 8:00 am – 5:00 pm

Unsold Gear Pick-Up: Sunday, October 15th from 9:00 am – 11:00 am

Please Note: Only people that register their items online by October 9th at 10 pm will be able to check-in their gear for the swap. Walk ups with gear that hasn’t been registered online, will not be accepted.

MBSEF takes a 25% commission on all sales. The funds raised from this commission are instrumental in achieving MBSEF’s goal of keeping program costs affordable and making competitive snow sports more accessible to the youth of our community.