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How to reform home insurance in California? Industry experts and consumer advocates speak

SACRAMENTO, Calif. (KGO) — California insurance companies are writing fewer policies and even leaving the state. But why are these companies pulling out? The industry claims it’s because they can’t make money. Consumer activists say it is a ploy to pressure lawmakers to deregulate the industry.

“What’s happening in Sacramento in the last few weeks of the legislative session is a proven tactic by big special interests and their allies in Sacramento to do something that will really hurt consumers,” said Consumer Watchdog’s Harvey Rosenfield.

Rosenfield authored Proposition 103, which regulates the insurance industry in California. He said he was left out of the insurance negotiations and that consumers were also being hidden from the discussion.

“I would call it an insurance industry insurgency trying to overturn a law passed by voters that the industry doesn’t like,” he says.

MORE: Secret recording of insurance lobbyist reveals plan to ‘block’ bill before end of session

This is not everyone’s opinion. Karl Susman, insurance broker and adjuster in West Los Angeles. “I’m happy to say, for the first time in probably three or four years, that I’ve hopped on shows like this and given my opinion. I’m optimistic that things are finally taking a turn in the right direction,” he says.

Susman says if we want affordable insurance in California, there has to be change.

“At the end of the day, again, we’re just looking at the math. Nobody’s doing anything fancy. Nobody’s doing anything sneaky. The Department of Insurance is going to look at the numbers. They’re going to see what “Companies are losing, what they need to change, what kind of guidelines they need to change to be able to be profitable again, and that’s what’s going to get the market going again,” Susman said.

MORE: California couple lose home insurance after draining pool to save water

Media reports – and those who seem to be in the know – tell 7 On Your Side that the insurance industry is looking for three main things:

  • Raise rates by looking to the future rather than the past, using undisclosed data that cannot be challenged by regulators.
  • Add surcharges to all policies to cover cost overruns associated with insuring “high risk insureds”.
  • Bill reinsurance to consumers. It is the insurance that insurance companies buy to spread their risk. Currently, reinsurance is considered simply as the cost of doing business.

“Insurance companies, under the guise of claiming they can’t afford the risk of climate change, want the legislature, first, to roll back all the Proposition 103 protections that have kept rates low over the years. of the past 35 years,” Rosenfied said. said.

Karl Susman sees things differently. “The timing gives a bad feeling, but that doesn’t necessarily mean the outcome will be drastically different than it would have been if it had taken, you know, a long period of time,” he says.

Check out more stories and videos from Michael Finney and 7 On Your Side.

The 7OYS Consumer Hotline is a free consumer mediation service for residents of the San Francisco Bay Area. We assist individuals with consumer-related problems; we cannot help you with business-to-business matters or matters involving family law, criminal matters, landlord-tenant disputes, employment issues, or medical issues. Please see our FAQs here. As part of our support process, it is necessary for us to contact the company/agency you are writing about. If you do not want us to contact them, please let us know immediately, as this will affect our ability to work on your case. Due to the high volume of emails we receive, please allow 3-5 business days for a response.

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