Homeowners across California are reeling amid an ongoing insurance crisis, and on Wednesday, the state’s insurance commissioner appeared before a Legislature seeking answers. Scott Budman reports.
Homeowners across California are reeling amid an ongoing insurance crisis, and on Wednesday, the state's insurance commissioner appeared before a Legislature seeking answers.
Commissioner Ricardo Lara, who's facing criticism for skipping out on a hearing last week, appeared at the state Capitol to answer questions about what lawmakers have called "an insurance industry in shambles."
Insurance companies have been dropping claims and coverage over the past several months, impacting thousands of families. The FAIR Plan, a last resort insurance coverage for Californians, has said it was at risk of running out of money from claims following the Los Angeles County wildfires earlier this year.
FAIR has asked for a $1 billion lifeline, and member insurance companies could pass along up to half of the costs to their customers.
Lara first provided an update to the Assembly committee before fielding questions. Here are some of the details he provided:
- There have been around 37,000 claims filed from the Los Angeles wildfires, and more than 27,000 claims have received partial payment.
- His office has ordered more than $12 billion in relief to date.
- His office has provided insurance support workshops during and after the wildfires.
- There are investigations of smoke damage claims as well as ensuring fair payments.
- He has ordred additional living expenses coverage as well as a first-ever public consumer claims.
- He addressed the risk of the FAIR Plan running out of money and its request for $1 billion.
After his update, Lara took questions from the committee. It wasn't immediately clear if he had to answer to skipping out on an insurance committee hearing last week for a trip to Bermuda. But his office confirmed Monday that it was a two-and-half day work trip to headline an industry conference.
In a statement, Lara's office said in part: "Commissioner Lara’s job is to ensure that California consumers have real choices – not just last resorts – when it comes to insurance. This involves going over the heads of insurance companies and engaging directly with the global reinsurance groups that support them. By disspelling myths and making a compelling case for California, he is working to retain insurance companies in the market and attract those that have left."
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Before Wednesday's hearing, Assembly Speaker Robert Rivas removed Assemblyman David Tangipa (R-Fresno) from the insurance committee after Tangipa became outspoken about the issue.
"I really believe we need a larger sense of urgency for the issues we see today in the insurance market," Tangipa said. "It's dire if we look at the California FAIR plan. We're barely going to have $350 million to cover $450 billion in assets that are covered under the California FAIR plan. That's less than 1%. We need leaders in the state, especially the insurance commissioner being here, going to every single meeting because every single Californian is about to feel this."
Democratic Assemblymember Lisa Calderon headed Wednesday's hearing.
