Gov. Gavin Newsom in an executive order asked the state’s Insurance Commissioner to “take prompt regulatory action to strengthen and stabilize California’s marketplace for homeown…
Gov. Gavin Newsom leaned into California’s home insurance market meltdown with an executive order Thursday urging the state’s elected commissioner to speed approval of rate increases and let insurers base requested hikes on factors posed by increasing risks of extreme weather and wildfires fueled by climate change.
Industry representatives said the order is an important step in averting collapse of the state’s insurance market due to losses from recent wildfires and other disasters and state regulations that make it hard to quickly raise rates to account for expected future risk from climate change. “Why would Gov. Newsom give his blessing to the insurance industry’s wish list that will cost Californians hundreds of thousands of dollars more on their insurance bills?” asked Harvey Rosenfield, founder of Consumer Watchdog and author of the state’s 1988 Proposition 103 voter insurance revolt that rolled back rates and required state approval for increases.
Newsom’s order lays out alarming figures capturing the state’s insurance market meltdown. Two of the state’s largest insurance carriers, representing over 27% of the state’s insurance market, have announced they would stop issuing new homeowners and commercial property insurance policies in California. Several others, representing an additional 36% of the market, announced plans to limit new policies.
The order asks the commissioner to craft “an appropriate regulatory response” expanding coverage choices for consumers, particularly in underserved areas and improve “the efficiency, speed and transparency of the department’s rate approval process.”
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