As homeowners face soaring insurance premiums, one candidate for California insurance commissioner is proposing a different approach: redirecting $3.6 billion in premiums into a state-based nonprofit disaster insurance program.
The proposal aims to lower coverage costs as wildfire insurance has become a central issue in the race.
Here's what to know
Jane Kim, an attorney and former San Francisco supervisor, introduced the proposal at a recent campaign appearance in Bakersfield, according to local news outlet KERO. Her opponent, State Sen. Ben Allen, followed up with his own visit to the Central Valley city, where he also promised to lower insurance premiums but with a different approach.
Under Kim's plan, existing payments to the insurance industry would fund the proposed nonprofit disaster coverage. Kim said Californians spend $18 billion annually on homeowners insurance and that wildfire costs equaled about $3.6 billion per year. If California retained that $3.6 billion, Kim argued, that money could fund a new nonprofit insurer from year one.
"If we work and we organize and we unite and we stay together, we can win real tangible changes that makes the differences in the lives in our community," Kim said, per KERO.
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A different approach
Under Allen's approach, California's private insurance market would stay intact. However, Allen has pledged to keep more premium dollars in California, according to KERO. He has also proposed to reduce costs by recruiting additional insurers to the state, arguing that competition among more companies would bring rates down.
Allen has further pushed for bringing insurance costs down by engaging with insurance companies and large corporations to take steps that would lower wildfire risk rather than leaving risk-reduction to local communities. He identified utilities and fossil fuel companies as corporate entities that he believes should join in the effort.
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Where can I learn more?
California homeowners have long been grappling with the insurance costs and coverage gaps candidates have pledged to address:
• California's FAIR Plan raised home insurance premiums 29%, leaving mountain residents fearing steeper bills.
• California wildfire survivors condemned Newsom's veto of insurer accountability bills intended to strengthen protections.
• A California homeowner found a quote $1,400 cheaper, but with a $25,000 wildfire deductible.
• In California's Inland Empire suburbs, even new homes faced coverage gaps amid the insurance crisis.
• State Farm will write new California policies again, but only for fire-hardened homes.
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