State insurance proposal run by Democrats falls short as wildfires rage

Californians’ homes and iconic landmarks are now at the mercy of the raging Palisades Fire, and state legislation to expand access to insurance across the Golden State may have come too late.

Just before the new year, the California Department of Insurance announced that it had reached the final step in passing a “Sustainable Insurance Strategy,” which, according to Text of the regulation, It will require insurers to increase coverage in high-risk areas affected by wildfires, and reduce costs passed on to customers.

But due to a 30-day review period, as FOX Business’ Cheryl Casson reported, the legislation had not taken effect by the time five wildfires — the Hearst, Eaton, Woodley, Palisades and Tyler fires — began burning Tuesday in Los Angeles. County, including the Pacific Palisades and Sylmar neighborhoods in Los Angeles and others near the city of Pasadena.

The fires were contained to zero percent. Officials told Fox NewsWhile more than 30,000 residents are subject to mandatory evacuation orders. Gov. Gavin Newsom also declared a state of emergency, warning that the worst winds were expected between 10pm on Tuesday and 5am on Wednesday.

WATCH LIVE: Wildfire coverage on FOX WEATHER

“A lot of these residents couldn’t get insurance for their homes to cover wildfires, whether it’s renter’s insurance or homeowner’s insurance,” Cassone said. On “Fox & Friends First” After pointing out the rise in insurance costs due to the increase in destruction in recent years.

“So, unfortunately, a lot of these people may not be able to cover their loss as well.”

Led by Commissioner Ricardo Lara, the legislation would specifically require insurers to write insurance policies for at least 85% of their market share and increase that limit by 5% each year, establish cost caps, set the cost of a standard policy and prevent “pattern shopping.” “

“Californians deserve a reliable insurance market that doesn’t hold back on communities most vulnerable to wildfires and climate change,” Commissioner Lara said. In a press release dated December 30.

He continued: “This is a historic moment for California. My sustainable insurance strategy focuses on addressing the challenges we face today and building a resilient insurance market for the future.” “With input from thousands of residents across California, this reform balances consumer protections with the need to strengthen our market against climate risks.”

Get FOX Business on the go by clicking here

The California Department of Insurance also notes that all other states except California allow reinsurance costs into coverage rates, and a 2023 review by the department revealed reinsurance as the top strategy companies are using to expand coverage in high-risk climate zones.

Of the 20 most destructive wildfires in California, seven have occurred in the past five years Department of Forestry and Fire Protection Reports. In terms of economic cost, the 2018 Camp Fire recorded losses worth $10 billion; The Tubbs Fire in 2017 cost $8.7 billion; The Woolsey Fire in 2018 cost $4.2 billion.

Read more from Fox Business