24 August 2020News

California seeks extra protections for policyholders in wildfire areas

The Senate Appropriations Committee has adopted amendments to Assembly Bill (AB) 2167 that will see California Insurance Commissioner Ricardo Lara investigate and develop solutions to ensure affordable, accessible insurance for homeowners in wildfire areas.

The bill asks the Commissioner to study the models insurance companies use to set home and renters insurance rates, strategies to address problems in the insurance markets, and the price and pass-through of reinsurance expenses. The bill is set to be voted on in the full Senate.

In its original form, AB 2167 would have raised homeowners' insurance premiums and repealed voter-approved consumer protections against excessive rate increases and discriminatory practices contained in Proposition 103. It was strongly opposed by California Insurance Commissioner Lara, Consumer Watchdog, Consumer Federation of California, and United Policyholders. The Senate Appropriations Committee amendments eliminated those provisions.

Carmen Balber, executive director of Consumer Watchdog, said the amended bill respects the voters' decision to entrust the Insurance Commissioner with the task  of addressing problems in the insurance marketplace using the powers given to him under Proposition 103.

"We appreciate the work done by the Appropriations Committee and Senator Anthony Portantino to protect homeowners from unjustified insurance rate hikes as wildfires cross the state," she said.