California: Governor Newsom supports insurance reform proposal
The Californer/10282797

~ SACRAMENTO - In a move to address the ongoing insurance crisis in California, Governor Gavin Newsom has announced his support for a new insurance reform proposal. The measure, which was introduced by California Insurance Commissioner Ricardo Lara, aims to provide more coverage options for Californians living in areas particularly threatened by wildfires.

Under the proposed regulation, insurers who use new catastrophe modeling will be required to write more policies in distressed areas. Additionally, larger insurance companies will be mandated to insure properties in these areas at a rate equal to 85% of their statewide market share. This is part of Commissioner Lara's Sustainable Insurance Strategy, a package of reforms aimed at strengthening California's marketplace and protecting consumers.

Governor Newsom expressed his belief that this action is crucial in addressing the state's long-standing insurance crisis. He stated that it will not only help homeowners facing higher wildfire threats but also alleviate pressure on the state's FAIR Plan. The Governor emphasized that as the climate crisis continues to intensify, it is essential to reform the insurance system, which has not been significantly updated in 30 years.

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Last year, Governor Newsom called for swift regulatory action to stabilize and strengthen California's marketplace. This included creating a better rate approval process, building a stronger FAIR Plan, and expediting the implementation of regulations. In line with this goal, the Newsom Administration recently released a proposal to increase transparency and speed up rate change application approval timelines while maintaining consumer protections from excessive and discriminatory rates.

The rise in insurance rates nationwide has been attributed to the impacts of the climate crisis. However, California's rates have remained below the national average and significantly lower than some other states. For instance, the average yearly cost for $300,000 homes is $1,405 in California compared to $2,601 nationally and $3,851 in Texas and $4,419 in Florida.

Governor Newsom's support for this insurance reform proposal is a significant step towards addressing the ongoing insurance crisis in California. With the state's climate crisis intensifying, it is crucial to strengthen the marketplace and ensure that Californians have access to adequate insurance coverage.

Filed Under: Government, State

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