Reinsurance costs alone are estimated to raise rates 30 to 50 percent.
SAN DIEGO — California’s Department of Insurance has a plan to address the state’s ongoing homeowners’ insurance crisis, with the goal of enticing insurance companies to resume writing policies in the state. However, consumer advocates are raising concerns that the proposed reforms may result in higher costs for homeowners.
Insurance Commissioner Ricardo Lara has introduced the Sustainable Insurance Strategy, which he believes will revitalize California’s insurance market by mid-2025.
“With the reforms that we’re proposing, I’m very confident that we’re going to see some real change,” Lara stated. “We’re going to see that California is back open for business. We’re going to see insurers coming back to California.”
The strategy includes several key components:• A faster rate approval process• Implementation of forward-looking catastrophe modeling• Reforms to the California FAIR Plan• Allowing insurers to factor reinsurance costs into rate hike requests
While Lara acknowledges that the plan is favorable to insurance companies, he …