In September, Governor Gavin Newsom issued an executive order taking emergency regulatory action to bring some stability to California’s home fire insurance market. This is especially important for homeowners living near our Southern California hillsides. Newsom’s action came after he and state Insurance Commissioner Ricardo Lara failed to negotiate a deal to keep home fire insurers in California. An ongoing problem that Newsom could have started solving in 2022, when a bill dealing with that very issue was on his desk. More on that in a moment.
If you own a home almost anywhere in California, you’re all too familiar with how the state’s insurance crisis exploded after a wave of devastating wildfires in 2017 and 2018 caused billions of dollars in damage. Many insurance companies dropped tens of thousands of policyholders living in the so-called wildland-urban interface. Homeowners then had to pay up to two and three times as much for alternative coverage.
The truth is, Governor Newsom had an opportunity to act on this issue a year ago when he received a bill I authored while representing many of you in the State Assembly. Assembly Bill 2450 in 2022 would have required the California Department of Insurance to evaluate a meaningful way to reduce fire insurance costs for home and property owners in high wildfire risk areas. This legislation received unanimous support from both Democrats and Republicans and not a single “no” vote. Unfortunately for California homeowners, Governor Newsom vetoed the bill.
If Governor Newsom had taken this issue more seriously a year ago, we would now be one step closer to expanding coverage and reducing the cost of living for residents seeking relief. He probably wouldn’t have needed to issue his executive order. Instead, Newsom wrote a veto message for AB 2450 in September 2022, stating that a “legislative mandate” was not necessary.
Newsom made a bad choice and chose the negotiation route instead, leaving California homeowners on the hook and at risk when he had a strongly supported solution in front of him just a year ago.
That’s not solving the problem; rather, his inaction has made the problem worse for homeowners. But this is not personal to our Governor, we see this pattern repeated throughout our political process. My approach and mindset has always been different, modelled on the sign former President Reagan had on his desk in the Oval Office: “There’s no limit to what a man can do or where he can go if he doesn’t mind who gets the credit”.
Given Newsom’s recent actions after the failed negotiations, I can’t help but wonder if he remembers the opportunity he had last year to start solving this problem? I won’t hold my breath, but I want to make sure California homeowners do, because it highlights the fact that California doesn’t have to be in the trouble it is. There are solutions, and there are elected officials who are working to fix our state and bring down every element that has contributed to the cost of living that has plagued California over the last decade.
We can solve our problems, but this example of Newsom’s bungling of fire insurance shows what happens when ego gets in the way of what is in the best interest of the people. During my time in the State Assembly, many families came to me to share their stories of how rising fire insurance costs had forced them to tighten their budgets and cut back on other basic necessities. It broke my heart, it’s unacceptable, and the state needed to do more. Assembly Bill 2450 was a first step to get us back on track. Our governor chose to negotiate, which failed, and now he has been forced to act. Let’s hope he learns from this mistake and that we all continue to demand action on the fire insurance crisis and lowering our overall cost of living.
