In a significant move to fortify the state’s insurance market, California Insurance Commissioner Ricardo Lara announced a new draft regulation today. The regulation mandates that insurers employing new catastrophe modeling must extend their coverage in distressed areas. Specifically, larger insurance companies will be required to insure properties in these high-risk areas at a rate that is 85% of their statewide market share. This initiative is a key component of Commissioner Lara’s Sustainable Insurance Strategy, a comprehensive reform package aimed at strengthening California’s insurance marketplace while maintaining robust consumer protections.
The Sustainable Insurance Strategy focuses on improving the rate approval process, enhancing the FAIR Plan, and expediting the implementation of new regulations. These efforts are designed to create a more resilient insurance market capable of withstanding the challenges posed by climate change.
In a related development, the Newsom Administration recently unveiled a proposal to increase transparency and speed in the rate change application approval process. This proposal aims to align with Proposition 103, ensuring consumer protection from excessive, inadequate, and unfairly discriminatory insurance rates.
Insurance rates across the United States have been rising due to the ongoing impacts of the climate crisis. Despite this trend, California’s rates have remained below the national average and significantly lower than those in some other states. For a home valued at $300,000, the average annual insurance cost is:
- California: $1,405
- National: $2,601
- Texas: $3,851
- Florida: $4,419
These figures highlight the relative affordability of insurance in California, even as the state continues to address the complex challenges of climate-related risks.
[inline_related_posts title=”You Might Be Interested In” title_align=”left” style=”list” number=”6″ align=”none” ids=”2529,2545,2549″ by=”categories” orderby=”rand” order=”DESC” hide_thumb=”no” thumb_right=”no” views=”no” date=”yes” grid_columns=”2″ post_type=”” tax=””]
