SACRAMENTO, Calif. — California Insurance Commissioner Ricardo Lara on Thursday announced a plan to improve insurance choices and protect Californians from climate change.
The plan includes a number of measures, such as:
Requiring insurance companies to cover all parts of California, including high wildfire-risk communities.
Giving priority to FAIR Plan policyholders who have complied with wildfire safety regulations when transitioning to the normal insurance market.
Expediting the development of new rules for reviewing climate catastrophe models that consider the benefits of wildfire safety and mitigation measures.
Directing the FAIR Plan to expand commercial coverage to $20 million per building.
Holding public meetings to discuss incorporating California-only reinsurance costs into rate filings.
Improving rate filing procedures and timelines.
Increasing data reporting by the FAIR Plan.
Making changes to the FAIR Plan to prevent it from going bankrupt in the case of a major catastrophe.
The plan builds on actions that Lara has already taken, such as enacting regulations to reward wildfire safety and mitigation efforts and sponsoring legislation to improve insurance benefits.
“We are at a major crossroads on insurance after multiple years of wildfires and storms intensified by the threat of climate change,” Lara said in a statement. “I am taking immediate action to implement lasting changes that will make Californians safer through a stronger, sustainable insurance market.”
Governor Gavin Newsom praised Lara’s plan in a statement, saying it is “critical that California’s insurance market works to protect homes and businesses in every corner of our state.”
The plan has been met with mixed reactions from the insurance industry. Some insurers have expressed support for the plan, while others have raised concerns about the financial impact of some of the proposed changes.
The plan is expected to go into effect in early 2024.