New CA regulation aims to expand insurance coverage in fire risk areas
December 30, 2024
- XS Brokers Promotes Buccinna in New York; Leadership Changes at Falvey Insurance
- Brayden Narveson may kick for Titans vs Colts
- Confronting Climate Change: Rising Insurance Costs can Curb Economic Growth
- Exploring American Coastal Insurance And 2 Other Promising Small Caps In The US Market
- Is the doctor overcharging me? How to avoid huge medical bills and lower existing ones.
Even with fire safety measures, California insurance crisis continues
Bạn đang xem: New CA regulation aims to expand insurance coverage in fire risk areas
The video discusses California’s wildfire mitigation measures and the ongoing insurance crisis homeowners face.
California’s insurance officials announced a new regulation on Monday intended to increase the availability of home insurance for Californians living in areas facing increased risks of wildfires and other potential disasters related to climate change.
Insurance Commissioner Ricardo Lara unveiled the “Net Cost of Reinsurance in Ratemaking Regulation,” which his office described as a “final major step in historic reform to expand insurance coverage across California.”
The new policy is intended to both increase access to insurance for Californians living in now-underserved regions, such as those threatened by fires, as well as encourage stability in the insurance market, the California Department of Insurance said in a written statement.
Xem thêm : Having a debate over insurance in the wake of a CEO’s shooting • Missouri Independent
Lara said the new regulation is the final step in his larger “Sustainable Insurance Strategy.”
“Californians deserve a reliable insurance market that doesn’t retreat from communities most vulnerable to wildfires and climate change,” he said. “This is a historic moment for California. My Sustainable Insurance Strategy is focused on addressing the challenges we face today and building a resilient insurance market for the future. With input from thousands of residents throughout California, this reform balances protecting consumers with the need to strengthen our market against climate risks.”
What does the new regulation do?
The new policy, “requires insurance companies — for the first time — to increase coverage in high-risk areas, ensuring more options for Californians while limiting the costs passed on to consumers,” according to the statement.
Insurers will be required to increase writing of comprehensive policies in wildfire-distressed areas amounting to at least 85% of their statewide market share, the CDI statement said. “There is no current legal requirement today for insurers to provide any coverage in high-risk areas.”
The companies will be required to increase their coverage levels by 5% annually until the threshold is met.
At the same time, it allows for insurance companies to factor in the costs of reinsurance when calculating rates, according to the CDI. Until now, California has been the only U.S. state that did not allow it.
Xem thêm : Emails show insurance concerns before Folly Beach drone show malfunction
Reinsurance allows insurance companies to share the risks associated with insuring high-risk properties.
“Reinsurance is the primary strategy most insurance companies use to continue to write and expand coverage in higher -risk parts of California and across the country,” the statement said. “Modernizing regulations around reinsurance will enable insurance companies to expand coverage and write more policies in communities across the state facing greater risk, ensuring stability and resilience in our insurance market.”
Officials added that the regulation also places cost caps on reinsurance costs, holding them to industry-wide standards.
‘Sustainable Insurance Strategy’
The new regulation regarding reinsurance is meant to work in tandem with a change to wildfire catastrophe modeling rules used by insurers announced by the CDI earlier this month.
“These two regulatory efforts work together, with other Sustainable Insurance Strategy reforms, to increase the availability of homeowners and commercial insurance policies in wildfire distressed areas,” the statement said.
The agency said the changes represented the largest reform to California insurance policy in 30 years.
California Gov. Gavin Newsom announced support for the plan when a draft was first unveiled in June.
“This is another critical action to help fix California’s decades-old insurance crisis. It will help homeowners who face higher threats of wildfire get the coverage they need, while also easing pressure off of the state’s FAIR Plan,” he said. “As the climate crisis has rapidly intensified, the insurance system hasn’t been seriously reformed in 30 years — this is part of our strategy to strengthen our marketplace and get folks the coverage they need.”
Nguồn: https://propertytax.pics
Danh mục: News