Will Lara and Newsom listen? They haven’t after years of dire warnings, so temper your expectations.
Former state Sen. Ricardo Lara, D-Bell Gardens, attends the gubernatorial inauguration ceremony of Gavin Newsom, Monday, Jan. 7, 2019, in Sacramento, Calif. SACRAMENTO – Reading insurance trade magazines isn’t everyone’s idea of a great time, but every Californian should pay attention to the latest news in that arcane world. “State Farm to pull out of 72,000 California home insurance policies,” blared an Insurance Business magazine.
Stories about the state’s crisis du jour have seeped into the mainstream media, too. “The ongoing home insurance crisis in California is about to deepen as yet another company has announced its withdrawal from the state over profitability concerns,”boasts that Insurance Commissioner Ricardo Lara “protects policy holders affected by wildfires from non-renewals.
I don’t live anywhere near a forest, yet my latest renewal showed a near-doubling of rates. After talking to my insurance agent, I decided to just pay the higher premium and be thankful I received a renewal. Increasing numbers of Californians must now rely on the so-calledThe burdens on the FAIR Plan have become so severe – it has three times more insureds than it was designed to cover – that there’sabout what happens if it fails.
The state’s leaders are acting like this is some unexpected perfect storm, but it’s one that’s been on the horizon for several years. “California’s one-two punch – forcing companies to write risky policies while also limiting their ability to charge market rates – would leave insurers with little choice but stop writing new policies,” Ithe state. Two months later, they stopped being quiet about it. In May, State Farm announced its freeze on writing new homeowner policies.on the state reaction.
Steven Greenhut is Western region director for the R Street Institute and a member of the Southern California News Group editorial board.
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