Californians were casting their final ballots Tuesday in a closely watched race for state insurance commissioner, a job that has taken on new urgency as wildfire losses, rising premiums and shrinking coverage options put pressure on homeowners across the state.
The insurance commissioner oversees the nation’s largest property insurance market, including homeowners and auto coverage, as well as health, life, pet, rideshare and workers’ compensation insurance. But in recent years, the office has been defined largely by the struggle to keep home and fire insurance available and affordable as wildfire risk grows.
The next commissioner will inherit a volatile market. Several insurers that had stopped writing new policies or declined to renew existing ones are now operating under new state regulations that allow them to use additional tools when setting rates. Those changes are expected to help companies account for wildfire risk, but they also are likely to mean higher premiums for many policyholders as the Department of Insurance continues weighing and approving requests for residential rate increases.
The issue is especially pressing in Southern California, where the aftermath of last year’s Los Angeles County wildfires continues to affect residents trying to rebuild. Delays and denials in insurance claims have been cited as major obstacles to recovery. State Farm, California’s largest individual insurer, and the FAIR Plan, the state’s insurer of last resort for fire coverage, are facing lawsuits from homeowners and legal action from the Department of Insurance over their handling of claims tied to those fires.
The leading Democratic candidates include state Sen. Ben Allen, who is termed out of the Legislature; Jane Kim, a California Working Families Party leader and former member of the San Francisco Board of Supervisors; Patrick Wolff, a financial analyst who has not held elected office; and Steven Bradford, a former state senator and assemblymember. The top Republican candidates also have not held statewide office: Stacy Korsgaden, a longtime insurance agent, and Merritt Farren, an attorney who lost his home in last year’s Palisades fire.
Candidates interviewed by CalMatters largely agreed on the scale of the insurance problems facing California but differed on how best to respond. Some have called for a larger state role in the market. Kim has proposed creating a state wildfire and flood authority funded by a portion of policyholders’ premiums. Farren supports forming a state reinsurance authority funded through a fee insurers charge policyholders, an idea that Kim and Allen also have expressed interest in exploring. Bradford has said he would examine a public-private partnership aimed at keeping insurers active in California.
Consumer advocates and former insurance commissioners say the job requires a difficult balancing act: protecting homeowners, business owners, landlords and renters while ensuring insurers can charge rates that reflect California’s increasing wildfire exposure.
U.S. Rep. John Garamendi, a Democrat whose district includes much of Contra Costa and Solano counties, was California’s first insurance commissioner and served in the position twice. He told CalMatters the role is complex, demanding and detail-heavy — a description that reflects the challenges awaiting the next person to hold the office.
Original source: CalMatters
