California voters are weighing in on a pivotal choice for the state’s next insurance commissioner, a race unfolding against the backdrop of nearly ten years of destructive wildfires that have left the property insurance market in turmoil and still searching for stable footing.
For the first time, two Democrats are facing off for the post. Former San Francisco Supervisor Jane Kim is pitching a bold idea: a publicly run disaster insurance program. Her opponent, state Sen. Ben Allen, argues that a broad wildfire-prevention strategy is the real key to solving California’s insurance woes — namely, making coverage available in high-risk fire zones and keeping it affordable as insurers hike premiums in response to mounting disaster losses and construction costs.
The stakes are personal for many residents. A recent survey from the Insurance Fairness Project, a national research group, and Data for Progress found that nearly half of Californians are now paying more for homeowners or renters insurance than they did a year ago.
Beyond fire coverage, the insurance commissioner oversees auto, life, pet and certain health insurance policies, along with workers’ compensation — a sprawling portfolio that experts describe as requiring a difficult balancing act between consumer protection and market stability.
Allen, who represents a district that includes survivors of the Palisades Fire, brings hands-on legislative experience with insurance issues, including recent efforts to address utility liability in wildfire cases. Kim, by contrast, hasn’t held elected office since 2019, but her record includes championing the state’s first $15 minimum wage law and securing free community college for San Francisco residents.
A victory for Allen would mark a win for the California Democratic Party, which has thrown its support behind him, along with a coalition of labor and business groups. Business interests have poured millions of dollars into boosting his campaign while working against Kim’s, with outside political committees funded in part by investor-owned utilities such as Pacific Gas & Electric and Southern California Edison, along with tech firms and wealthy donors.
At a debate between the two candidates last month, Kim framed herself as the candidate running “against the status quo.”
Should Kim prevail, it would be seen as another milestone for the progressive movement gaining traction across the state, and further evidence of the lasting appeal of the populist politics championed by Vermont Sen. Bernie Sanders, one of her most prominent backers. Her campaign has drawn much of its direct funding from labor unions, including an endorsement from the California Labor Federation, while the Working Families Party — which Kim once led — has supplied most of the outside money behind her bid.
Kim has been candid that establishing a public disaster insurance system would be no easy task, acknowledging it could take years to implement. Under her proposal, premiums homeowners currently pay to private insurers would instead be redirected into a state-run program guaranteeing wildfire coverage. The concept has drawn sharp criticism not just from the insurance industry, but from consumer advocates with insurance expertise who warn it could expose the state to significant financial risk.
During the debate, Allen dismissed Kim’s public insurance concept as “unmoored and unresearched,” arguing it simply wouldn’t work in California. Kim, in turn, characterized his approach as more of the same ineffective policy.
Whoever wins the race to succeed outgoing Commissioner Ricardo Lara will inherit a long list of challenges, both from past disasters and those yet to come.
Chief among them will be ensuring insurers pay out claims promptly and fairly — an issue still affecting survivors of last year’s devastating Los Angeles County fires, many of whom continue to face delays and denials. Lara’s department currently has pending enforcement actions against State Farm, the state’s largest individual insurer, as well as against the FAIR Plan, the insurer of last resort, over how they’ve handled claims stemming from the Eaton and Palisades fires.
With El Niño conditions looming, insurance coverage is expected to take on added importance in the months ahead. Lara, along with industry representatives and other experts, is urging Californians to safeguard their homes against flooding and wind damage — and to strongly consider purchasing flood insurance before it’s too late.
Original source: CalMatters
