Today, California Senate Republicans delivered an urgent letter to Insurance Commissioner Ricardo Lara requesting that he take action to fix the state’s broken homeowners’ insurance market. Commissioner Lara is responsible for regulating the industry. Over the past year, three major insurance companies have exited the state, and since then, two smaller companies also have announced they will soon follow suit. California Senate Republicans expect more insurance companies will flee, unless Insurance Commissioner Lara takes immediate action.
“California needs a healthy and stable homeowners’ insurance market that is accessible to all,” said Senate Minority Leader Brian W. Jones (R-San Diego). “Our current market is on the brink of collapse and Californians are struggling to find and purchase affordable homeowners’ insurance. While the Legislature has failed to act, Insurance Commissioner Lara has the power to begin solving these problems under his current authority and we stand ready to work with him to fix this broken market.”
Most recently this summer, two of California’s largest homeowners insurers - Allstate and State Farm - announced they have stopped writing new policies to homeowners while a third - Farmers - announced it will limit how many policies it writes. These announcements were an immediate red flag, alerting everyone to the growing risk that our homeowners’ insurance market is on the edge of crisis and may collapse unless drastic actions are taken to modernize it and prevent complete failure. Such a collapse would hurt California homeowners, and aspiring homeowners, the most.
Last week, two other home insurers not only announced they are no longer offering new policies for Californians, but they also are not renewing existing policies.
“My constituents are already suffering,” said Senator Brian Dahle (R-Bieber)who represents much of the state’s communities that fall in high-fire severity zones. “In order to avoid exponential and unaffordable rate hikes on Californians in the near future, we must act now. Californians can’t afford for a catastrophic wildfire to collapse the market and leave those insured without the coverage they may need to rebuild.”
In a letter dated August 24, 2023, California Senate Republicans urgently requested Insurance Commissioner Lara to take immediate action as it relates to ensuring a healthy insurance market. You can read the entire letter here.