New California regulation requires insurance companies to offer coverage in high-risk areas

[BumRushDaShow]

Source: The Hill

12/31/24 4:16 PM ET


California insurers will be required to sell coverage in wildfire-prone regions that have seen an insurer exodus in recent years, state Insurance Commissioner Ricardo Lara announced Monday.

Under the new regulations, companies must make their services available in high-risk areas to do business in the state, the first such requirement in California history. Insurers must write policies covering at least 85 percent of their statewide market share in those vulnerable regions, increasing such coverage by 5 percent increments every two years until they reach that threshold, Lara said.

The commissioner’s office said the requirement will be limited to California, so in-state consumers will not be on the hook for the insurance costs of other high-risk areas, like the Gulf Coast.

Lara said the rule aims to keep insurers from “model-shopping,” the practice of using a higher-rate model for consumers and a separate model that lowers reinsurance costs for the insurers. Under the California regulations, insurers will be required to use a single model.

Read more: https://thehill.com/policy/energy-environment/5061625-california-insurers-regulations-high-risk-areas-coverage/

[hueymahl]

1. California is going to not have any insurance soon

If they keep up these policies. As the article highlights, there has been a mass exodus of insurers from the state due to its public policies.

[thatdemguy]

2. And just like that everyone in California will start complaining when the prices skyrocket.

Just like they are doing in Florida.

[paleotn]

3. Oh, sure, they can write it in high risk areas, but no one can afford it.

And rightly so. Seems there's a relatively simple solution to this problem. Stop developing in high risk areas. Insurance rates based on actual risk levels, and without state governments putting their thumbs on the scale, might do just that. Sorry, I know the scenery is beautiful, but there's some places that make zero sense to live in permanently or invest much capital.

[travelingthrulife]

4. It will be just like the flood insurance no one can afford. They are required to

offer it so they send out a notice once a year.
We will all be placed in high risk now.