Governor, insurance commissioner finally address homeowners’ insurance crisis

September 21, 2023September 21, 2023 swilliams

According to a statement from the California Senate Republicans after repeated efforts by Senate Minority Leader Brian W. Jones, District 1 Senator Brain Dahle and the California Senate Republicans to address the homeowners’ insurance crisis in this state, Governor Gavin Newsom and Insurance Commissioner Ricardo Lara finally announced some actions to mitigate the crisis today.

“I’ve fought for better protections for homeowners for years,” Dahle said last week. “Californians are suffering unjustly and deserve strong and empathetic leadership right now.”

“I am encouraged to see the governor and Insurance Commissioner taking the insurance crisis seriously,” said Jones. “While Californians needed them (Newsom and Lara) to act on this crisis years ago, I’m glad that Commissioner Lara has now heeded the Republican Caucus’ advice to act on his existing authority rather than just waiting for a legislative deal to emerge.”

While the Republican leaders pat themselves on the back over this progress, Lassen County District 5 Supervisor Jason Ingram, who has repeatedly complained to Lara without a response from the insurance commissioner, won’t be satisfied until there’s concrete action that provides relief to Lassen County homeowners.

“I’m glad the governor is finally telling his insurance commissioner to do something, but there’s no solution there, just more smoke,” Ingram said. “But what are they doing? The solution is to lift the cap that he (Lara) has put on private insurers on how much they can raise their insurance premiums. How many rate increases are still sitting on his desk, and why does that rate increase process have to go before Ricardo Lara? Just lift that cap, get it out of the way, and hopefully we can get some of these insurance companies back in the state. Until they suggest a real solution, we’re not going to get real insurance companies to come back to the state. Period.”

“This is yet another example of how climate change is directly threatening our communities and livelihoods,” Newsom said. “It is critical that California’s insurance market works to protect homes and businesses in every corner of our state. A balanced approach that will help maintain fair prices and protections for Californians is essential. I look forward to continuing to work with Commissioner Lara and others to strengthen our marketplace and protect Californians.”

Last month, California Senate Republicans sent a letter on behalf of their constituents demanding that both the governor and insurance commissioner take immediate action to fix the state’s broken homeowners’ insurance crisis.

“The people of California need a stable insurance market and today’s executive order, along with the commissioner’s plan of action, is a step towards stabilizing the market,” Jones continued. “I renew our invitation to partner with him moving forward and again invite him to come speak to our caucus about any progress being made. Californians need to have affordable access to protect their homes from natural elements of earth, wind and fire – and those who are facing increased costs today sure will remember this promise made on the 21st day of September.”

Here’s the governor’s statement on this new development.

What to know
The executive order urges Insurance Commissioner Lara to take swift action to address issues with the insurance market and expand coverage options for consumers, while maintaining strong consumer protections and keeping plans affordable.

As climate change continues threatening our communities with more extreme wildfires, floods and droughts, state insurance markets throughout the country have faced significant disruption. Newsom is urging Lara to take action to stabilize and improve California’s property insurance marketplace.

Some companies have already announced they will stop issuing new policies in California. Others are limiting policy renewals. We can expect more of this to come in the short term. That is why it is critical for the Insurance Commissioner to act quickly to help stabilize the state’s marketplace, while maintaining consumer protections and fair rates.

This executive order requests that the Commissioner of Insurance take swift regulatory action to strengthen and stabilize California’s marketplace, with the following goals:

California Insurance Commissioner Ricardo Lara.

Expand choices, stabilize market
Expand coverage choices for consumers, particularly in underserved areas of the state. Maintain the long-term availability of homeowners and commercial property insurance coverage.

Better rate approval process
Improve the efficiency, speed and transparency of the rate approval process. Tailor the rate approval process to account for all factors necessary to promote a robust, competitive insurance marketplace.

Stronger FAIR Plan
Maintain the solvency of the FAIR Plan to protect its policyholders and promote long-term resiliency in the face of climate change, including by identifying mechanisms to reduce its share of the overall market in underserved areas and move its customers into the admitted insurance market.

Accelerate implementation
Direct the Department of Finance to consult with the California Department of Insurance to support the rulemaking process and help accelerate implementation of potential regulations.

A copy of the Newsom’s executive order can be found here.