CA Home Insurance Premiums Continue Rising

California home insurance premiums continue to rise, and the situation is getting untenable. My personal home insurance policy went up more than $1,200 last year, and I’m hearing the same from many of my clients.

This CalMatters article offers a good overview of the situation. Basically the rise in wildfires has created record liability for insurers, and many insurance companies are passing this burden along to their consumers, dropping homeowners from coverage, or refusing to insure certain homes.

To make sure our voices are heard, I wrote and sent this letter to California Insurance Commissioner Ricardo Lara last month.

If you’d like to get involved, I highly recommend contacting the insurance commissioner and governor by letter, form or phone call. Hearing from constituents can make a big difference for legislators. And it’s all we can really do right now! Feel free to use parts of my letter if you contact them.

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Contact Insurance Commissioner Ricardo Lara

Online form: https://cdiapps.insurance.ca.gov/contactus/default.aspx

Phone: 1-800-927-4357

Address:

Insurance Commissioner

California Department of Insurance

300 Capitol Mall

Sacramento, CA 95814

Contact Governor Gavin Newsom

Online form: https://govapps.gov.ca.gov/gov40mail/

Phone: 916-445-2841

Address:

Governor Gavin Newsom

1303 10th Street, Suite 1173

Sacramento, CA 95814

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 Dear Commissioner Lara:

I am writing on behalf of my insurance agency, Insurance Scouts Insurance Agency, in Mammoth Lakes, and even more importantly, the many California insurance consumers we serve, to plead for your support of efforts to incentivize insurers to resume writing and renewing property insurance policies.

 We realize you are cognizant of the affordability and availability crisis now gripping the residential and commercial property insurance marketplace in the aggregate, but allow me to share just a few examples of how this crisis is affecting actual policyholders of ours.

• The California Fair Plan has been one of our primary solutions for too many homeowners. The coverage is expensive, incomplete, and the service & experience is not on par with the primary market.

• One of our carriers is renewing homeowner insurance- and that’s a better option when comparing to nonrenewal. However the increases are significant and we have seen year over year increase of over 50%. This is still a better option than fair plan but the primary admitted market will not quote the majority of these homeowners to give homeowners a competing option. We just had a renewal for a long time insured- an elderly widow who is on a fixed income and has already entered into a reverse mortgage. Their premium is going up $124 per month and will put this widow in a drastic situation.

• We have experienced several commercial non-renewals with no admitted options to help these businesses. As of today we have 69 appointments with carriers and access to whoever maybe an option- however in many circumstances there are no admitted or reasonable options. California has become a toxic place for carriers to write business under your guidance as insurance commissioner.

 We appreciate your efforts, not only here in California, but also through your work at the NAIC, to mitigate future wildfire losses through home- and community-hardening, to impose moratoria, where you legally could, on insurance policy non-renewals, to solicit consumer feedback in townhalls across the state, and to approve small rate increase requests filed by insurers.

But more — much more — is needed.

 The 2017, 2018, and 2020 California wildfires set records for area burned, structures destroyed, and lives lost. Insurance companies incurred more than $30 billion in insured losses over these three years– which, as you must know, is not financially sustainable.

We were disappointed that you opposed AB 2167 in the Legislature last year. We felt strongly that the “Market Action Plan,” as amended, would have given insurers a significant incentive to resume writing and renewing policies in the Wildland Urban Interface areas that have been hardest hit by wildfires, while preserving your full regulatory authority over insurers and their rates, and promoting risk mitigation.

We would respectfully urge you to reevaluate that concept, and consider using your very significant regulatory powers to fashion a plan of your own design with the same objectives.

The status quo is untenable, not only for agencies like ours, but also for our desperate customers. Expanding the already-overwhelmed FAIR Plan is, in our view, unworkable. Emphasis on forest management and other forms of risk mitigation is laudable, but not a “quick fix.”

Respectfully yours,

Brian Jaegers, ChFC, CWCA, Agency President