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California Must Act on Fire Insurance Crisis

By Assemblyman Kevin Kiley September 24, 2019

As many homeowners know all too well, there is a growing fire insurance crisis facing our state, which is felt most acutely by the residents of Placer County and surrounding communities. Increasing fire insurance cancellations and skyrocketing premiums have been documented in 25 counties, all of which are in rural Northern California.

The size of the problem is growing every year according to the Department of Insurance, which reports the number of cancellation complaints tripled since 2010. A review of the numbers shows Placer has had the most cancellations of any county in the state, followed closely by El Dorado.

In addition, many residents whose homes remain insured have seen their premiums skyrocket. My office receives calls and emails every month from residents who are being priced out of their homes and having to seriously consider moving their families out of the area. One resident reported to me that the only available private insurance option to cover her home would cost three times what she was currently paying. Another constituent said that even the FAIR plan, the state’s insurer of last resort, offered rates that were three times higher than her previous rate. These extreme hardships for individual homeowners threaten to cascade across our communities, as houses become unsaleable or property values diminish, lowering property tax revenues and depleting county treasuries.

This is a crisis that demands swift action and bold solutions -- with the goals of stabilizing rates, protecting homeowners, and providing the right incentives for all parties to minimize the risks to property and human life. It is also imperative that the Legislature and Governor give fire protection the priority it deserves -- real, long-term planning, not surface-level political reaction -- so that the scourge of catastrophic wildfires does not continue to ravage communities across our state.

Earlier this month I supported Assembly Bill 1816 to begin finding a way out of this crisis. The legislation now sits on Governor Gavin Newsom’s desk awaiting his signature. If signed, the bill would give homeowners additional time to find replacement coverage if their policy is cancelled and would double the amount of state coverage afforded to homeowners if their insurer goes insolvent in the event of a fire or other disaster. It would also provide tax credit incentives to insurers that write policies in high fire risk areas to help improve options and lower prices for consumers.

This is an important first step toward fixing the problem. But we cannot stop here. I am currently working with the Insurance Commissioner and my colleagues in the Legislature to develop more solutions, and when the Legislature returns to session, ensuring our residents have access to affordable fire insurance coverage must be a top priority.

 

Assemblyman Kevin Kiley represents the 6th Assembly District, which includes parts of El Dorado, Placer, and Sacramento counties. A taxpayer advocate, Assemblyman Kiley will be holding a town hall on Monday, September 30 from 6:00 to 8:00 PM at the Martha Riley Library (1501 Pleasant Grove Blvd) in Roseville.