The growing vulnerability to natural disasters, especially wildfires, has driven insurance companies to retreat from coverage in California (Photo: Credit:Toa55)
REDLANDS, Calif. — California Insurance Commissioner Ricardo Lara and Third District Supervisor Dawn Rowe will host a virtual town hall on Sept. 4 to discuss the state's efforts to tackle the homeowner insurance crisis.
Why it matters: Many California homeowners are finding it increasingly difficult to secure adequate coverage as major insurance carriers withdraw from the state. The growing vulnerability to natural disasters, especially wildfires, has driven this trend. Climate change has only heightened these risks, resulting in more frequent and severe fire seasons.
Details: The event, which will run from 5 to 6 p.m. via Zoom, aims to provide residents with information and updates on the evolving situation.
Last year, State Farm and Allstate announced they would stop issuing new homeowners and commercial property insurance policies in the state. Other providers have announced a slew of nonrenewals, leaving homeowners to grapple with the task of finding coverage while living in high-risk areas that are prone to wildfires.
In a June 12 press release, Lara unveiled the next steps in his strategy to increase homeowners and commercial insurance coverage in vulnerable areas.
The plan aims to address dwindling insurance availability by allowing companies to use forward-looking catastrophe models for ratemaking if they commit to writing more policies in high-risk areas.
What they’re saying: "Californians in every corner of our state are frustrated with outdated regulations and desperate for change," Lara said. "We are enacting a major reform that will result in insurance companies writing more policies, so if you are stuck on the FAIR Plan because of your unique wildfire risk, there will be help for you."
The commissioners' strategy targets areas where more than 15% of policies are written by the California FAIR Plan, the state's insurer of last resort, as well as low-income areas with high insurance premiums.
Under the new regulations, larger insurance companies must write policies for at least 85% of properties in distressed areas within two years of a rate filing being adopted. Smaller companies and new entrants must expand their writings by at least 5%.
The new regulations also require insurers to take into account wildfire mitigation efforts at individual property, community and regional levels when using catastrophe models.
