Soaring Insurance Rates Have States Considering Price Caps

Summary

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WSJ What’s News – Episode Summary

Date: October 20, 2025
Title: Soaring Insurance Rates Have States Considering Price Caps
Host: Alex Osola
Notable Guest: Jean Eaglesham (WSJ reporter, insurance industry)
Other Contributors: Bel Lynn (AI and tech coverage)

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Brief Overview

This episode looks at major developments in business and finance, focusing on:

• A widespread Amazon Web Services (AWS) outage disrupting major platforms
• Soaring home and auto insurance rates across the US, with some states exploring controversial price caps
• The California dilemma: balancing affordability and availability in insurance markets
• Notable market movements, especially Apple’s record high, and other business headlines
• Din Tai Fung’s rise as America’s most successful restaurant chain

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Key Discussion Points and Insights

1. Amazon Web Services Outage (00:18–02:37)

• Scope & Impact: Major AWS outage affects millions, bringing down websites and services across sectors, including Facebook, Snapchat, Fidelity, Venmo, United Airlines, and Amazon’s own shopping platform.
• Technical Details: Outage triggered by an error in a tech update to a widely-used database service (DynamoDB) in Amazon’s oldest data centers.
• Underlying Issues:
  • “There's a lot of legacy and sort of older tech there. And so those are some of the underlying issues at play here.”
    — Bel Lynn (01:57)
• Larger Context: Outages in cloud services are increasingly noticeable as more of the economy relies on them.

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2. The US Insurance “Cost Crisis” (02:37–06:25)

a. Surging Premiums

• Rates doubling in some states:
  • “Rates up to doubling in some states so far outstripping inflation.” — Jean Eaglesham (03:27)
• Key drivers:
  • High inflation in repair and replacement costs
  • Rising home values
  • Natural catastrophes (hailstorms, wildfires, etc.)
• Pain for consumers:
  • “Homeowners and drivers are really feeling the pain of this.” — Jean Eaglesham (03:53)

b. States Respond: Considering Price Controls

• Illinois: Governor seeks power for regulators to veto rate hikes after a major State Farm premium increase.
• Louisiana: Bans “excessive” rates, allowing regulators to demand refunds without actuarial justification.
  • “They can be defined as excessive without any actuarial underpinning. So you don't have to show that there's no basis for it. You can just say it seems excessive to me.” — Jean Eaglesham (04:11)

c. The California Example: Warning and Lessons

• California’s 6.9% cap: Held for decades, keeping rates below national average despite high risks.
• Recent Crisis: Major insurers stopped selling new policies, leading to difficulties for homeowners in finding insurance.
• Regulatory Response: Reversal with rapid double-digit rate approvals to keep insurers in the market.
• Balance Issue:
  • “We can't really have affordability unless you have availability. So you have somehow persuade the insurers to keep selling.” — Jean Eaglesham (05:33)
  • Regulators nationwide struggle to protect policyholders without causing an insurer exodus.

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3. Notable Quotes & Memorable Moments

• “Insurance has this long, long history of being regulation by state that exempts it from federal antitrust laws. And these states take their own approach to whether they think price caps are appropriate or not.”
  — Jean Eaglesham (04:11)

• “That's a balance the regulators say they're trying to draw, which is very difficult. So protecting policyholders without leading to a California style exodus of insurers.”
  — Jean Eaglesham (06:02)

• “Homeowners and drivers are really feeling the pain of this.”
  — Jean Eaglesham (03:53)

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Important Segments with Timestamps

• AWS Outage Breakdown – 00:18–02:37
• Insurance Rates Crisis Overview – 02:37–03:27
• Why Rates Are So High—Contributing Factors – (03:27–04:04)
• State-Level Caps & Responses – (04:04–05:01)
• Drawbacks of Price Controls: The California Example – (05:01–05:59)
• Regulators’ Balancing Act in Other States – (06:02–06:21)

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Additional Headlines Covered

Apple Hits New Record High (06:29–07:36)

• Strong iPhone 17 sales—up 14% vs previous year—driving shares up nearly 4%, surpassing Microsoft in market cap.
• “Apple’s rise boosted major indexes. The Nasdaq led the gains, adding 1.4%...” — Alex Osola (06:29)

Posthumous Effects of Charlie Kirk’s Death (08:08–09:30)

• Bible sales in the US spiked 36% year-over-year to 2.4 million copies sold in September.
• Disney+ and Hulu cancellations surge after Jimmy Kimmel’s temporary removal post-Kirk comments.

Kering Sells Beauty Business to L’Oréal (09:31–10:18)

• $4.66 billion deal transferring top perfume brands and rights for Kering’s luxury lines to L’Oréal.
• Delivers Kering a strategic refocus amid lagging Gucci sales and a four-year stock decline.

Supreme Court to Weigh Gun Rights for Drug Users (10:18–10:56)

• Federal ban on gun ownership by illegal drug users under review. The law was the basis for Hunter Biden’s previous conviction.

Middle East Diplomatic Tensions (10:56–11:32)

• President Biden’s administration and Trump administration figures engage in ceasefire negotiations following renewed violence between Hamas and Israel.

Din Tai Fung: America’s Most Successful Restaurant Chain (11:32–12:52)

• Highest average sales among US restaurant chains: $27 million per location, with lines hours long at its flagship Manhattan spot.
• The US expansion continues, driven by social media buzz and the popularity of its famous dumplings.

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Summary Tone and Style

• Clear, concise, and neutral reporting, typical of The Wall Street Journal.
• Objective coverage: presenting the perspectives of industry experts (e.g., Jean Eaglesham) alongside market facts and regulatory details.
• Accessible language for a general business audience.
• Memorable, direct quotes highlight complex regulatory tensions and real-world consumer impacts.

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For Listeners Who Missed It

• The episode gives a comprehensive look at why insurance rates are soaring—and why the supposed fix of price controls is so controversial and fraught with unintended consequences.
• It distills nationwide trends into understandable stories—whether it’s insurance, tech outages, or hot new business trends (like Din Tai Fung’s TikTok-fueled success).
• Quotes and explanations from experienced WSJ reporters provide clarity on what’s behind the headlines and what businesses, consumers, and regulators are grappling with right now.

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Transcript

[IBM Representative]

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[Alex Osola]

Major websites and apps were down for millions of people as the Amazon Web Services outage continues. Plus big price increases for home and auto insurance. Have some states considering price caps?

[Jean Eaglesham]

That's a balanced regulation to say they're trying to draw, which is very difficult. So protecting policyholders without leading to a California style exodus of insurers and a.

[Alex Osola]

Report of strong iPhone sales sent Apple stock to a new high. It's Monday, October 20th. I'm Alex Osola for the Wall Street Journal. This is the PM edition of what's news, the top headlines and business stories that move the world today. Amazon was working to fully restore service more than 12 hours after a wide ranging Internet outage began. Millions of websites and platforms rely on Amazon web services for cloud computing and problems with its network affect the wider Internet. Disruptions were reported for a range of companies from Facebook and Snapchat to financial services companies including Fidelity and Venmo to United Airlines to Amazon's own shopping site. The Wall Street Journal was one of several media organizations feeling the impact today, and for me personally, my attempt to book some holiday travel did not work. The outage began around 3am Eastern Time after an error in a technical update to a widely used database service that knocked the database offline in Amazon's data centers in Northern Virginia. Other AWS services then failed too. Bel Lynn, who covers AI and enterprise technology for the Journal, told us why it's taking so long for Amazon to fix this issue.

[Bel Lynn]

There's typically a lot of complexity involved in any cloud infrastructure service, but in this case it sounds like from what Amazon has told its customers, that there's a lot of different services involved. It's not just its DynamoDB database, but an issue there that caused a bunch of other services to go down. And so when things like that happen, it's not easy for any cloud provider, whether Amazon, Microsoft or Google, to get all their services back online. And then one other caveat that's important to note is that the data center that was affected here is one of Amazon's oldest. What tech insiders sort of know is that there's a lot of legacy and sort of older tech there. And so those are some of the underlying issues at play here.

[Alex Osola]

AWS is the largest cloud computing service provider in the US Outages in cloud services aren't uncommon but have become more noticeable as more companies rely on them. America is in a cost crisis when it comes to home and auto insurance. Since 2020, state regulators have allowed companies to raise the cost of insuring a home by an average of 50%. And increases in auto rates aren't far behind. That's according to S and P Global Market Intelligence. Some states have a controversial answer to those big rate hikes, price controls. Jean Eaglesham covers insurance for the Journal and joins me now with more. Jean, you write that the cost of home and auto insurance premiums have gone up a ton across the US how much are we really talking and why is this happening?

[Jean Eaglesham]

What we've seen since the pandemic is rates up to doubling in some states so far outstripping inflation. And there's a number of factors driven that. One is high inflation in things like repair costs, replacement costs. We've seen the value of homes go up. Also we've seen a rise in natural catastrophes. So hailstorms, wildfires, all of that combining is insurers have pushed up premiums very significantly year on year. We're now starting to see a slight easing in auto rates. But overall, I think homeowners and drivers are really feeling the pain of this.

[Alex Osola]

So in response, several states are considering putting price controls on those premiums. What do those proposals look like?

[Jean Eaglesham]

Insurance has this long, long history of being regulation by state that exempts it from the federal antitrust laws. And these states take their own approach to whether they think price caps are appropriate or not. Illinois is an interesting example. The governor there this summer backed a form of veto for the regulators so they could reject rate increases. And that was after a very significant increase by State Farm. And he was kind of incensed that he couldn't do anything about that. We're also seeing, for example, Louisiana is interesting. They've introduced a measure that bans so called excessive rates. And they can be defined as excessive without any actuarial underpinning. So you don't have to show that there's no basis for it. You can just say it seems excessive to me. And they can even demand refunds from the insurers.

[Alex Osola]

Are there drawbacks to this approach of putting price controls on premiums?

[Jean Eaglesham]

Certainly the insurers industry will say very vehemently there are big drawbacks to this. And their poster child is California. And California for decades had an effective 6.9% cap on rate rises. And that worked for a long time in a sense that say their home insurance rates are below the the national average. Despite having a lot of pricey real estate and a lot of disasters. But it's led to a crisis in the last couple of years where pretty much all the major home insurers have stopped selling new insurance and a lot of homeowners are struggling to get a policy at all. And what we've seen is regulators reacting to that by allowing through a series of very steep price increases, double digit price increases. And their argument is we can't really have affordability unless you have availability. So you have somehow persuade the insurers to keep selling.

[Alex Osola]

And is that happening in other states as well?

[Jean Eaglesham]

So some of those states are still allowing through pretty big increases just because they're concerned to keep the insurers healthy in their market. And that's a balance the regulators say they're trying to draw, which is very difficult. So protecting policyholders without leading to a California style exodus of insurers.

[Alex Osola]

Wall Street Journal reporter Jean Eaglesham. Jean, thanks so much for being here.

[Jean Eaglesham]

My pleasure.

[Alex Osola]

In US Markets today, Apple closed at a record high after a report that sales of this year's iPhone models had started strongly. Shares of the tech giant climbed nearly 4% to more than $262 a share. It topped Microsoft in market cap, becoming number two. By that measure, Nvidia remains number one. Counterpoint, a research firm said that the iPhone 17 phones outsold the iPhone 16 by 14% in the first 10 days were available in the US and China. Wall street has been watching sales of the new phones to see if they surpass previous rollouts. Apple's rise boosted major indexes. The Nasdaq led the gains, adding 1.4%. And the Dow and the S&P 500 both gained more than 1%. Expect a busy week in markets with nearly one fifth of the S&P 500 due to report results this week, including Netflix and Tesla. Coming up, a dumpling craze is fueling America's most successful restaurant chain. More on that and more after the break.

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[Alex Osola]

It's been a bit over a month since conservative activist Charlie Kirk was killed, but some of the effects are only becoming clear now. One interesting data point sales of Bibles soared in the weeks after Kirk's death. According to book tracker Circana BookScan, there were 2.4 million Bibles sold in the US in September, a 36% jump over the same month of 2024. That's the biggest month of Bible sales so far this year and bucks a broader trend of weakening print sales in the U.S. the president of HarperCollins Christian Publishing said Bible sales have been strong over the last two years, but it seemed that Kirk's death had awakened a lot of people. HarperCollins Publishers like the Wall Street Journal, is owned by News Corp. Separately, Disney felt an impact after the company temporarily took Jimmy Kimmel off the air following his comments related to Kirk's death. According to data from Antenna, a subscription analytics company, an estimated 3 million subscribers canceled Disney plus in September and 4.1 million canceled Hulu. Those cancellation numbers were bigger than the average over the last three months for those services and are a sign that customers were upset over Disney's decision to briefly suspend the show. Shares of French luxury company Kering rose more than 4% today after it said it was selling its beauty business to L' Oreal for 4 billion euros, equivalent to $4.66 billion, confirming a wall Street Journal report over the weekend. Kering is selling perfume brand House of Creed, which it bought only two years ago. It's also giving l' Oreal the exclusive rights to develop perfumes and cosmetics for Kering labels like Gucci and Balenciaga for 50 years. The deal could leave Kering with less debt and better focus on its core luxury brands. Gucci, its largest brand by revenue, has suffered from slowing sales in China, and Kering's share price has dropped by half over the past four years. The Supreme Court said today that it would decide whether drug users have a constitutional right to own a gun. There's a federal law that bans people who use illegal drugs like meth or cocaine from owning a gun, and the Trump administration wants to keep that law in place. It's a rare example of the administration advocating for gun control instead of pushing to expand gun rights. The law was the basis for one of Hunter Biden's convictions last year. A federal jury in Delaware found him guilty of three felony counts, including possession of a revolver while being an unlawful drug user. He was later pardoned by his father. Former President Joe Biden and President Trump's special envoy. Steve Witkoff and son in law Jared Kushner arrived in Israel today to try to keep a fragile ceasefire and peace process for Gaza on track after clashes between Hamas and Israel over the weekend, Israel launched strikes against dozens of Hamas targets, saying the militant group had previously killed two of its troops in an attack. Skirmishing continued today. And finally, which restaurant chain do you think has the highest average sales in the U.S. i'll give you a hint. It's not Cheesecake Factory or Del Frisco's Double Eagle Steakhouse. It's Taiwanese restaurant chain Din Tai Fungi, which has just 16 locations in the U.S. its large restaurants and rapid service are feeding America's craze for dumplings. On TikTok and other social media, it's not hard to find people posting videos with strong feelings about its food. The contrast of the texture of the dumpling skin and the sticky rice is just heaven in your mouth.

[Bel Lynn]

It's apparently a really popular restaurant because it took three hours for us to.

[Alex Osola]

Get this table had the same feelings on the Shamai as they did for the Xiaolongbao. It was just bland, not very juicy and underwhelming. That buzz is translating to real money. According to market research firm Tecnomic, the company's US restaurants generated an average of $27 million in annual sales last year. That's the highest number among the 1500 restaurant chains with five or more locations that tech nomomic tracks. Din Tai Fung's Manhattan restaurant in Times Square is the chain's top selling location in the US and it's growing, announcing its latest location today, a 20,000 square foot space on the ground floor of a luxury Brooklyn apartment building, the restaurant is expected to open in 2027. And that's what's news for this Monday afternoon. Today's show is produced by Pierre Bienname and Zoe Kolkin, with supervising producer Tali Arbel. I'm Alex Osola for the Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.

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