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Even better, the non-profit, Consumer Watchdog, that ran the ballot initiative that voters voted for, wrote in a way that it could earn intervenor fees when it contested rate increases. amp.sacbee.com/article1262790
Before the wildfire crisis, the insurance commissioner job used to be a stepping stone with great name recognition for higher office. But now it’s a political graveyard because no one wants to do the unpopular job of raising homeowners’ insurance premiums.
Lara has stalled on allowing insurance companies to factor in catastrophic modeling and reinsurance rates, which has caused 7 of the 12 top insurance companies to stop issuing new policies in California. Even today, I get emails on local mailing lists from homeowners trying to
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Kim-Mai Cutler
@kimmaicutler
It is truly embarrassing how poorly @RicardoLara4CA is doing his job: calmatters.org/economy/2024/0
As a result, our state plan of last resort, FAIR (which offers barebones fire insurance, meaning homeowners still have to find wraparound coverage for other risks) has tripled in size over the last five years and now has $458B in exposure. bloomberg.com/opinion/articl
Over the summer, FAIR testified it only had about $385 million in unreserved funds available to pay claims and $2.5B in reinsurance. But the today looked at zip codes around the various LA fires and noted it could have up to $24B of exposure.
“When the FAIR Plan runs out of money to pay claims, it’s allowed to split its remaining costs amongst all of the licensed insurers in the state, with costs allocated according to each company’s market share.”
This is why insurance companies were non-renewing customers that were
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In July, Lara announced a new plan to handle the FAIR liability.
For the first $1B each of residential and commercial claims, insurers would be required to pay half themselves, with the option of passing on the other half to their customers.
How much is this going to cost you?
Consumer Watchdog (LOL, the same group that ran the 1988 initiative) said this summer that a major wildfire could force FAIR to impose a surcharge of $1,000 on insurance policies throughout CA. Multiple wildfires could be $3,700.
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But if they don’t allow a surcharge, it’s hard to see how insurance companies would come back to California and we’d become uninsurable, tanking our property values and tax revenues.
There’s also a weird alternate universe where Consumer Watchdog (this fucking non-profit) didn’t happen to be on the same August 2023 Southwest flight as some lobbyists, then secretly record their conversation, leak it to Politico and tank this agreement and maybe it would’ve
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In case anyone is interested in how making a claim with FAIR insurance will go. I’m going to document it.
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Geoff Wolfe
@geoffwolfe
Lost our house in Palisades. Started claim today with CA state-managed FAIR. If you want to see progress on how this works out, you can follow me. I’ll provide updates.
Day 1: filed initial claim
I’m sorry. This totally sucks to have to go through and is horrible. If we keep public attention on it then hopefully that will keep pressure on state govt to fix this.
Interesting, what are the second order consequences of this I wonder
Our current system, where lots of homeowners are getting non-renewed. Beyond that, the second level of this is that at least prior to this fall, if our last resort plan FAIR became insolvent, the existing insurers in the market would get charged according to their California
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Speed up your live meetings and voting sessions with the click of a button!
Ma’am all 50 states have an insurance commissioner. This is the common format.
They act as a regulator and consumer advocate, functioning similar to utilities commissions that likewise negotiate and regulate rates in that regard.
Here’s a recent North Carolina example. Insurers
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Imagine if we did this with the price of homes. Want to sell your home for more than your property tax assessment? Here, get approval from a board of potential buyers and see how that goes.
I wonder how that could go wrong.
is it for *any* increase or just more than 7%?
g; Not every rate increase goes through a public hearing, but significant increases or those that attract public attention might. The elected Insurance Commissioner does have the final say on rate approvals, ensuring they align with
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Oof when the resident proves the outsiders correct that the locals voted for it themselves…
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Hello, here is your unroll: threadreaderapp.com/thread/1877507 Share this if you think it's interesting. 
OK, but that's not the problem. The problem is prop 13 and the lack of funding and a commitment to actually take the risk of doing controlled burns, and hiring former prisoners and homeless people to tend goats to clear brush and not building smarter
Isn’t the end result going to be the exit of all private insurance and FAIR going bankrupt? When it does, federal bailout?
Imagine forcing someone to sell you a product for the price you choose. What could go wrong. Wait until they cap CC interest rates. Better buy stock in pay day loan companies.
California is a great example of why our country is a representative democracy. Direct democracy sounds great on paper, but you end up with these batshit crazy laws that also sound good on paper. And even though the effects are detrimental, they are impossible to roll back.
Working inside the government now, one of the hardest lessons to convey is that so much of how government functions is in response to choices by lawmakers (the voters here playing that role). The hoops were placed there on purpose!
Proposal: ballot measures passed with less than 66% support are automatically voted on again every 20 years to let the next generation weigh in
And those public hearings are drawn-out and very costly.
This is why it's often easier for them to cancel a lot of people, then jack up prices on rich homeowners, rather than to try to insure the whole group.
Price control is never good, and insurance price control is very bad.
#6 - Employees for insurance companies are some of the most caring people you will ever meet. They work hard and truly care about their customers. It's hard work with little appreciation. It's a contract, it's protection, and it works most of the time.
California has the nation’s highest housing costs. Some blame a housing shortage; others, government policies. We sit down with experts to explore what’s driving costs and discuss the state-mandated Housing Development initiative and why some cities push back.
#5 As a final note, and very important one for the public to know. Insurance companies are heavily regulated. They operate on a thin margin. Not allowed to overcharge or hold large amounts of money such as google, apple, colleges, tesla, etc.
How do we get all the smartest people together to create will designed ballot measures that undo all the craziness?
This is a great summary; however, if insurance companies conclude that their risk is too high and they are likely to incur losses due to dramatic changes, they simply refuse to insure the properties if they cannot increase premiums. How would that be addressed? You cannot compel
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Recall Lara and get a less political insurance commissioner. Poizner understood the economics.
Transparency. Fairness. Exceptional member service. Plus, we can save employers up to 33% compared to traditional health plans. See why our members love us.
#3 - Insurance Co's are in the negative. Actuarily predict future losses. Are required by law to hold assets to protect the risk on the books. File for rate increases with insurance commissioner but rate increase are declined.
#2 - Who deceive the public into thinking they know insurance better than the insurance co's. Public believes them. Huge amounts of money goes out to a few after a fire or hurricane but masses pay in.
#4 If the insurance co is not able to acquire and retain assets (premiums) to protect the risks insured they have to non-renew policies. If gov caps increases, it strangles access to private insurance to it citizens.
Insurance companies are pulling out of markets in Florida without these price controls; the insurance companies will do it anyway.
The private sector simply cannot handle this.
# 1 Listen! Take a 100-year-old insurance company like State Farm. Agents in every community, building relationships with communities, paying claims, following laws, and building trust. Actuarily balancing huge amounts of risk and protecting assets. Then you have politicians.
What do you think is the most likely outcome? CA will let insurance companies truly price according to risk? Massive surcharges for FAIR coverage? What does this do to home values in CA if insurance is either nonexistent or prohibitively expensive?
Insurance companies would be committing suicide if they continue doing business in California with these regulations in a state run by morons. They all should pull out if they’re still solvent after this event.
I’m vehemently against voter initiatives and voting no on almost all of them across the board. It’s not our job to pass laws and the initiatives are written in a way to get whatever result the people in power want.
Do we still do this? Maybe that's the real problem.
in other words, California’s left wing voters are responsible for all the chaos in the state, the mostly incompetent elected official and destructive policies