SAN BERNARDINO COUNTY – The San Bernardino County Board of Supervisors passed a resolution, on June 25, requesting California to declare a state of emergency for insurance crisis.
“The Insurance Commissioner, State Legislature, and the Governor are requested to declare a state of emergency and take immediate emergency regulatory and legislative action to strengthen and stabilize California’s marketplace for homeowners insurance and commercial property insurance,” said a statement on the resolution.
State Farm requests to increase rates by 30%
Supervisor Paul Cook said for the past two years, many of his constituents — particularly in the mountain and foothill communities — have been dropped by big carriers such as Allstate and State Farm, forcing them to find other insurance companies to keep their mortgages.
State Farm, which insures 1 in 5 homes in California, last week, requested to increase rates by 30%. This is after announcing it would be dropping 72,000 houses and apartments this summer. The company also previously said they would not issue new policies due to wildfire risk.
All State and several other companies took the same stance, leaving some homeowners with California’s insurer of last resort, the FAIR Plan. Critics have said the plan tends to be more expensive than conventional property insurance and offers less coverage.
Insurance Commissioner has authority to adopt emergency regulations
According to the board’s resolution, the California insurance commissioner has broad authority under the insurance code to adopt emergency regulations to promote public welfare.
The board said the commissioner must consider goals that include expanding coverage choices for all consumers, particularly in underserved areas and improving the efficiency of the California Department of Insurance’s rate approval process when crafting a regulatory response.
“Our resolution asks Insurance Commissioner Ricardo Lara, Governor Gavin Newsom and the State Legislature to declare a State of Emergency and take immediate action to expand coverage choices, improve the approval process, and ensure the long-term viability of both the homeowners/commercial insurance market and the FAIR Plan,” said Cook.
To read the full resolution visit https://sanbernardino.legistar.com/View.ashx?M=F&ID=13051512&GUID=0CC21CF4-0DC5-4B96-845D-47EAD824B95D
