A week after negotiations to rescue California’s floundering home insurance market stalled out in the Legislature, the state’s top insurance regulator put out his own rescue plan that effectively amounts to a trade for the state’s major insurers.
Under proposed regulations Insurance Commissioner Ricardo Lara announced this afternoon, major insurers will be required to cover a certain share of homeowners in the state’s most wildfire-prone areas. In exchange, the Department of Insurance will allow companies to charge more to cover the rising costs of doing business in a fire-ravaged state.
Lara called the package of new proposed regulations “the largest insurance reform” since 1988, the year California voters passed a proposition requiring insurance companies to get prior approval before raising premiums.
The plan is meant to reverse what has amounted to a slow-motion exodus of private home insurers from the state. In the last year and a half, seven of the top 12 property insurers operating in California have either placed new restrictions on where they do business or stopped selling new policies here entirely.
