Governor Newsom pushes for a bill to quickly review insurance rate hikes, addressing California homeowners struggles especially with the overburdened FAIR Plan amidst broader insurance reform talks.
Governor Gavin Newsom Pushes for Swift Action on California Homeowners Insurance Challenges with Bill to Expedite Rate Hike Reviews
In response to homeowners insurance challenges in California, Governor Gavin Newsom aims to stabilize the situation swiftly. He supports a bill expediting insurers rate hike requests review process. This bill mandates the Department of Insurance to complete reviews within 60 days to prevent further market withdrawals, according to the report of Los Angeles Times.
The Governor stresses immediate action due to insurers hesitating to renew policies or issue new ones, pushing homeowners to rely on the FAIR Plan. With FAIR Plan already burdened with $300 billion in payouts, Newsom aims to relieve the strain.
Newsom opts for legislative measures over an executive order to stabilize the market and encourage insurers positively. Accelerating rate hike review aims to proactively address homeowners ongoing challenges.
(photo: Yahoo News Canada)
California’s Insurance Reform Debate
The proposed bill emerges amid broader insurance reform discussions in Sacramento. Insurance Commissioner Ricardo Lara’s Sustainable Insurance Strategy aims to stabilize rates and incentivize coverage in wildfire-prone areas. However, these regulations won’t become law until year-end prompting Newsom’s push for immediate action.
Consumer groups raise concerns about the proposed bill, fearing it may hastily approve rate increases. Jamie Court, Consumer Watchdog president notes Proposition 103 already mandates a 60-day review period for rate hikes with exceptions.
The insurance industry’s response to the proposal is pending. Rex Frazier, Personal Insurance Federation of California president, highlights existing review delays and reserves comment until the draft bill’s release.
Furthermore, Newsom’s office will release the draft bill undergoing legislative scrutiny as part of budget adoption. With a revised $288 billion budget and efforts to address a significant shortfall and proposed bill is a critical component of California’s response to homeowners’ insurance challenges.
