California voters will choose between two Democrats in November in the race to oversee the state’s troubled insurance market, a contest with major implications for wildfire-prone communities across Southern California and the Inland Empire.
Former San Francisco Supervisor Jane Kim and state Sen. Ben Allen advanced from the June primary as the top two finishers. With 88% of ballots counted, Kim had about 27% of the vote and Allen had about 20%. The winner will replace Insurance Commissioner Ricardo Lara, a Democrat and former state lawmaker who is completing his second term.
It is the first time since California made the insurance commissioner an elected office that two Democrats will face each other in the November runoff.
The next commissioner will inherit a system under intense strain. In recent years, major insurers have stopped writing new policies or declined to renew existing ones in parts of California, particularly in areas considered at high risk for wildfire. Companies have pointed to climate-driven fire danger and post-pandemic inflation as reasons for pulling back.
That shift has forced more homeowners into the California FAIR Plan, the state’s insurer of last resort for fire coverage. The plan, which is operated by an association of insurers, had more than 684,000 policies in force as of March — a 152% increase since September 2022. The FAIR Plan has also warned about its ability to continue covering claims after major disasters.
For residents in fire-prone areas of Riverside, San Bernardino and other Southern California counties, the debate is not abstract. Insurance availability and cost can affect whether families can keep their homes, whether buyers can obtain mortgages, and whether businesses can afford to operate.
Under Proposition 103, the 1988 voter-approved law that reshaped insurance regulation in California, the elected insurance commissioner has authority over rate increases, among other powers. The law has helped keep California homeowners insurance premiums in the middle range compared with other states, but that may be changing.
Last year, the state adopted new rules allowing insurers to use additional factors when setting premiums, including catastrophe modeling and reinsurance costs. Some companies have already sought and received approval for rate hikes, and some have begun writing policies again.
Balancing affordability with availability is expected to be the central challenge for the next commissioner. The office also regulates auto insurance, pet insurance, parts of the health insurance market and workers’ compensation.
Another major issue will be claims handling after disasters. The 2025 Los Angeles-area fires intensified scrutiny of insurer practices, including delayed or denied claims, underinsurance and disputes over smoke damage. Those problems have slowed rebuilding for some residents and small businesses. Pending legislation, lawsuits and pressure from organized fire survivors are expected to keep the issue at the forefront after Lara leaves office.
Kim has drawn attention for proposing what she calls “natural disaster insurance for all,” a state-backed system inspired by a New Zealand model. Under her concept, insurers would collect a portion of policyholder premiums and direct that money to the state, which would guarantee fire and flood coverage. Private insurers would continue covering other risks.
Critics, including some consumer advocates, have questioned how much funding such a system would require and whether shifting catastrophic risk to the state would create new fiscal problems. Some have compared the idea to the separation of earthquake coverage from homeowners insurance, noting that many California homeowners now do not carry earthquake insurance.
Kim has argued that taxpayers are already left paying when insurers and utilities do not cover losses.
“We already are on the hook,” Kim told CalMatters. “When insurers and utilities refuse to pay, they just pass it on to us anyway. Sharing the risk is important.”
She has also said that a proposal raised by Republican commissioner candidate Merritt Farren — creating a state reinsurance authority to encourage insurers to keep writing policies in California — could prove to be “a more efficient model.”
Kim’s shorter-term proposals include creating public dashboards showing how insurers spend premiums and how they handle claims; expanding eligibility for a low-cost auto insurance program for drivers earning less than $38,000 a year; connecting an insurer’s ability to sell auto coverage in California to its willingness to write homeowners policies; increasing transparency at the FAIR Plan by making its board membership and meetings public; and freezing rates when policyholders file claims.
An attorney and former San Francisco elected official, Kim points to her work on free community college for city residents, a $15 minimum wage ordinance and tenant protections against unjust evictions. She later served as California director for Sen. Bernie Sanders’ 2020 presidential campaign and as California director for the Working Families Party.
Her endorsements include Sanders, Rep. Ro Khanna of Silicon Valley and several labor groups, including SEIU California.
Allen, who represents a Los Angeles-area district in the state Senate and will be termed out of the Legislature, has emphasized a broader risk-reduction strategy. He has said the state needs to bring together insurers, builders, local governments, firefighters and state officials to reduce fire danger and stabilize the market.
“I think that’s ultimately going to be the way that we get ourselves out of this mess,” Allen told CalMatters.
Allen has also called for a more careful approach to development in high-risk areas.
“We shouldn’t be building new construction that is irresponsible in high-risk areas,” he said. “We should be looking for ways to carefully and sensitively encourage people to pull back from high-risk areas.”
If elected, Allen says he would create a consumer advocate position within the Department of Insurance and increase staffing for customer service. He also wants insurers to provide clearer explanations when they deny claims and to give real-time information about delays and unresolved claims after disasters.
Other parts of his platform include stronger oversight of the FAIR Plan, ensuring the plan follows commissioner orders, and prohibiting the insurance commissioner and department staff from immediately taking jobs in the insurance industry after leaving state service.
Allen has highlighted his legislative record on insurance issues. One law he authored requires insurers to pay 60% of a policyholder’s contents coverage without first requiring a detailed inventory and gives consumers more time to provide that inventory. He also authored Proposition 4, the climate bond voters approved in 2024 for safe drinking water, wildfire prevention and protection of communities and natural lands from climate risks.
Allen is also carrying pending bills that would require insurers to give homeowners 90 days’ notice before nonrenewal, along with a clear explanation, and impose penalties on companies that fail to correct unlawful practices identified by the Department of Insurance.
His endorsers include Senate President Pro Tem Monique Limón, Assembly Speaker Robert Rivas, U.S. Sens. Adam Schiff and Alex Padilla, labor unions and the Consumer Federation of California.
Original source: CalMatters
