California faces a major insurance crisis - but state politicians refuse to act to fix the problem. Meanwhile, California homeowners are getting hurt - through massive spikes in their insurance rates that range from 40% increases to double or triple – and many are losing their coverage altogether!
CA State Representative Carl DeMaio, who is also chairman of Reform California, says reckless policies imposed by state Democrat politicians are to blame for the insurance crisis.
DeMaio is offering his own plan to fix the problem he calls the California Insurance Reform and Rate Stabilization Initiative.
DeMaio’s plan would cap rate increases at no more than 7% a year for the next 5 years – and would force the state government to cover any difference in coverage costs. DeMaio specifically proposes to suspend the state insurance tax and use general and special fund revenues to provide rebates to homeowners to stabilize rates.
DeMaio says the insurance crisis is frightening for homeowners — because their home is their most important investment and they cannot assume the liability of not having insurance and mortgage companies will cancel their mortgage without it.
“I have had senior citizens on fixed income call me in tears because they simply cannot afford the massive spike in their insurance premiums,” DeMaio warned.
State Farm Insurance even announced in recent weeks that it would discontinue 72,000 home policies in California — which follows its move last year, where it made the decision to leave the home insurance market in California and stop processing applications. A who’s who list of other leading insurance companies have made similar announcements.
Meanwhile, other insurers have begun making the same choice or seeking to raise their rates by 30-40%. In many areas, the cost of insurance has gone up by a factor of ten in recent years — and it could get even worse.
DeMaio says the “non-stop announcements by leading insurance companies that they are leaving the state and canceling coverage should have been a wake up call to state politicians that something was seriously wrong in the insurance market.”
DeMaio warns that if action is not taken immediately, California homeowners will get crushed by the crisis.
Democrat politicians falsely claim that the insurance crisis is being caused by “climate change.” DeMaio says that’s completely not true and has the stats and data to prove it.
“Auto insurance rates are spiking as well - has anyone bothered to ask Democrats to explain how that is caused by climate change?” DeMaio muses.
DeMaio says the insurance crisis is caused by three drivers.
First, massive surge in inflation under Joe Biden has caused the cost of home damage repair (construction/appliance costs) to skyrocket way above the assumed models that insurance companies expected when they set premiums in 2019-2023.
Second, the severity of wildfires is worse because CA Democrat politicians have refused to allow proper forest management practices.
Third, the insurance regulations prevent insurance companies from providing cost-efficient policies that reflect rapidly changing market conditions.
“Besides blaming climate change, state politicians have dithered and delayed in addressing these core issues - and the crisis is only getting worse,” DeMaio warns.
DeMaio is offering his own plan to fix the problem: California Insurance Reform and Rate Stabilization Initiative. Among elements contained in the plan:
DeMaio says that most of these policies will not be enacted by California’s current Democrat supermajority government — and can only be implemented if the public demands change or new leaders are elected.
DeMaio is making insurance reform a key component of the Reform California Voter Guide for any endorsements for candidates running for office in 2026 – and is exploring putting his insurance reform package on the 2026 ballot for a public vote.
