Wildfire-prone CA to consider new rules for property insurance pricing, commissioner announces
SACRAMENTO (KGO) -- The day started with Gov. Gavin Newsom signing an executive order urging Insurance Commissioner Ricardo Lara to take swift action to address issues with the insurance market, and swift he was. This afternoon, the commissioner announced a major overhaul of California's property insurance regulations.
"We are at an insurance crossroads," Commissioner Lara said. "Making insurance more available and becoming critical for our entire economy. With the climate crisis and historic inflation, we are truly living in unprecedented times."
Among the changes insurance companies will be able to:
- Base their rates on what could happen as seen through computer modeling, rather than what has happened in the past
- Charge consumers for the cost of reinsurance if the company chooses to reinsure
- Faster rate increases
RELATED: Consumer groups ask CA governor to halt insurance industry discussions, say they've been left out
In return the companies will:
- Offer discounts for hardening a home against loss
- Guarantee insurance companies will offer insurance to at least 85% of those in wild fire areas
- Work to decrease the amount of homeowners stuck in the insurance of last resort called the FAIR plan
"If these proposals go through, people will be paying much more money for their home insurance. I mean, reinsurance costs can add 30% to the cost of home insurance," Consumer Watchdog's Jamie Court says.
Insurance regulations are complex, a tweak here or there makes a major difference. 7 On Your Side will be keeping track.
Take a look at more stories and videos by Michael Finney and 7 On Your Side.
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