Almost six years to the day since the start of 2017’s catastrophic Tubbs Fire, state lawmakers gathered in Santa Rosa, this time for a public hearing to talk about wildfires and California’s ailing home insurance market.
Several home insurers – including State Farm, the state’s largest – have stopped writing new policies. And many have dropped existing customers, citing undue financial risk.
Monday’s meeting was co-hosted by the state Assembly’s Insurance Committee, chaired by Lisa Calderon.
“We’re hearing about more and more homeowners going naked, which is an insurance term that describes when a homeowner decides not to have insurance coverage,” Calderon said.
There is also a select committee on forest fire prevention, chaired by Damon Connolly.
The politicians have invited firefighting officials and experts, insurance industry representatives, consumer advocates and climate scientists.
“Our goal is to ensure that any future measures to stabilise the market and expand coverage for homeowners are done with the input and cooperation of stakeholders and members of the community,” said Connolly.
One conclusion everyone agreed on was that something has to change.
But Karen Collins of the American Property Casualty Insurance Association, an industry group, says the impact on California’s insurance market is not isolated.
“The U.S. property insurance market is actually facing the most difficult market cycle in more than a generation, and that’s affecting catastrophe-exposed markets, really across the U.S.,” Collins said. Collins said.
Reforms to the state’s FAIR plan – the insurance market of last resort – as well as reforms to allow risk assessment models to factor in fire mitigation efforts have both been touted as part of the overall solution to California’s insurance market woes.
While a recent legislative effort to overhaul the state’s insurance market failed, California Insurance Commissioner Ricardo Lara has issued new rules to force insurers to reinstate a certain percentage of policies in wildfire-prone areas.
