Reform California Releases Plan to Stabilize Insurance Rates

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 or by losing their coverage altogether!

Carl DeMaio, 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 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:

1. Reduce Costly Regulations: DeMaio proposes an overhaul of insurance regulations to ensure that rate models accurately reflect the state’s fast-changing operating environment. In addition, since replacement costs are the biggest financial driver of the current crisis, DeMaio proposes major reforms to the state’s convoluted construction codes and regulations to drive down construction costs linked to property damage. 
2. Fix Fire Management: DeMaio is demanding immediate action to reform fire management policies and regulations so millions of acres of high-risk land can be properly thinned to reduce the risk of severe and catastrophic wildfire.
3. Stabilize Rates: While the reforms outlined in the first two proposals are done, DeMaio proposes immediate action to stabilize rates. DeMaio is proposing to offer an immediate insurance rebate to every policyholder to refund the insurance tax currently collected by state government. In addition, DeMaio is proposing to provide those hardest hit by insurance rate hikes additional stabilization rebates by tapping money currently wasted on climate change programs.
4. National Reinsurance Stabilization Program: DeMaio says federal intervention is crucial to address the national insurance crisis worsened by Biden administration policies and inflation. A reinsurance “bridge financing” program supported and organized by the federal government can help mitigate risks and stabilize the insurance market during this challenging period. With construction costs soaring nationwide, federal assistance is essential to ensure the financial stability of homeowners across the country.

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. 

“If you’re a homeowner and your insurance is canceled or your rate spikes, you need to realize that it is because the Democrats who currently call all the shots in state government refused to actually solve the problem — and you need to vote them out of office this November,” says DeMaio. 

That’s why DeMaio and Reform California are focused on recruiting and supporting a slate of candidates in the November election who will support these common sense policies to drive down the insurance rates and aid homeowners — who will appear on their annual “Plain English” voter guide. The guide will be available at ElectionGuideCalifornia.org by late September.

Support the voter guide program to elect these candidates and seek change in California below.