In a recent interview, insurance consumer advocate Amy Bach discussed California’s ongoing home insurance availability crisis and potential solutions. According to Bach, insurers continue exiting the California market, leaving many homeowners unable to purchase new policies or renew existing ones.
Insurers argue that California’s strict regulatory environment, including Proposition 103’s rate regulation protections, hinder their ability to adequately price and manage risk. Insurers want faster rate increases, use of catastrophe models in rate making, and passing reinsurance costs to policyholders. However, Bach notes that Prop 103 has historically benefited consumers by keeping rates affordable.
Both sides agree the situation has changed in recent years due to climate change-driven wildfires and other disasters. Insurers now face unprecedented losses that existing rate structures may not fully account for. At the same time, consumers struggle with limited options and affordability challenges.
Rather than accusations, Bach calls for constructive dialogue to restore a competitive market. Potential solutions discussed include streamlining the rate approval process through improved filings and department resources. The goal is an efficient yet thorough review that considers all perspectives.
Overall, there are no easy answers to this complex problem impacting millions of Californians. Further cooperation between regulators, insurers, and consumer advocates may be needed to develop balanced reforms providing stability, choice, and fairness for homeowners and the insurance industry alike.
*Views expressed in this video/article are opinions of the author and do not necessarily reflect the views of California Insider.
