California plans significant changes to insurance rules as wildfires increase risk

EHN

California regulators propose major insurance reforms to address soaring costs and dwindling options for homeowners in wildfire-prone areas.

Sharon Udasin reports for The Hill.

In short:

  • California is considering updates to Proposition 103, which currently limits insurance rate changes, to require firms to cover high-risk areas based on market share.
  • The proposal includes using “catastrophe modeling” to better assess wildfire risks, though its impact on rates is debated.
  • Experts worry that while these changes may attract insurers back, they could also raise costs for consumers.
    Key quote:

“We are nervous. The reality is that prices are so high already, and affordability is so low right now.”

— Amy Bach, executive director of United Policyholders

Why this matters:

As wildfires worsen, Californians face fewer and costlier insurance options. These reforms could determine whether homeowners in high-risk areas can find or afford coverage. Read more: Insurance woes increase as climate change impacts profitability.

The information presented in this publication is for general informational purposes and is not a substitute for legal advice. If you have a specific legal issue or problem, United Policyholders recommends that you consult with an attorney. Guidance on hiring professional help can be found in the “Find Help” section of www.uphelp.org. United Policyholders does not sell insurance or certify, endorse or warrant any of the insurance products, vendors, or professionals identified on our website.

Source: https://uphelp.org/california-plans-significant-changes-to-insurance-rules-as-wildfires-increase-risk/
Date: September 27, 2024