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As Californianshead to the polls Tuesday, the governor’s and Los Angeles mayoral races aren’t the only contests drawing attention. Voters are also choosing the state’s next insurance commissioner as the industry grapples with mounting wildfire losses and soaring costs.
The California Department of Insurance regulates how insurers and licensees conduct business in the state, including approving rates on homeowner, auto and business coverage.
Democrat Ricardo Lara, the current insurance commissioner, is termed out — opening the door for new blood at a time when Californians are still grappling with the aftermath of the Palisades Fire and an industry that is facing extensive scrutiny.
Following the devastating wildfires, major insurance companies in the state have dropped coverage and forced residents to turn to the California Fair Plan with much less protective coverage and higher out-of-pocket costs to rebuild their homes.
Last month, state regulators conducted aprobe into State Farm, California’s largest insurance provider, and found astaggering 398 violationsof state law in 114 of the 220 sample claims that were looked into.
Regulators are pushing a multimillion-dollar fine and possible license suspension for the insurance company after the California Department of Insurance investigation last month found it delayed claims,lowballed payouts, and shuffled adjusters, sowing confusion for policyholders.
State Farmcalled the probe a “politically motivated attack that could ultimately cripple California’s homeowners insurance market.”
But the increased threat of wildfires is not going away, and the next insurance commissioner will have to grapple with residents seeking more coverage options, at a time when companies might seek to opt out of a market that poses to much risk.
“It’s not that people will face higher rates, it’s that they will need to go get insurance from another insurance company, and those companies are not required to write insurance,” Dave Jones, the former California Insurance Commissioner, told The California Post last month, underscoring that other carriers might not want the additional exposure in a state where wildfire risks have increased.
Source: California Post – Breaking California News, Photos & Videos
