Senator Marie Alvarado-Gil calls on Insurance Commissioner to Reject FAIR Plan Rate Hike

Senator Marie Alvarado-Gil (R-Jackson) is calling on Insurance Commissioner Ricardo Lara to reject the proposed 35.8% rate hike by the California Fair Access to Insurance Requirements (FAIR) Plan.

While California Insurance Commissioner Ricardo Lara has enjoyed a full travel schedule with 48 extensive and luxurious global trips in his time as Insurance Commissioner, and as insurance carriers were leaving the state, all hell broke loose in the already precarious insurance market.

“Senate District 4’s rural residents—hardworking stewards of California’s wildlands and forests—deserve protection, not betrayal. As a voice for rural communities in the Senate, I will continue fighting for a more sustainable insurance market and to reject this rate hike,” said Senator Alvarado-Gil.

The Senator warns in her letter to Lara: the “premium increase would be a devastating blow for the high-fire-risk communities in my district and across rural California where private insurers have fled and left us utterly dependent on the FAIR Plan as our sole provider of property insurance. This rate hike will only expedite the mass exodus of families and businesses out of California.”

“You have the authority—and the moral imperative—to deny this proposal immediately. As you stated recently, ‘As we tackle availability concerns and ensure that insurance companies provide consumers with policies in the traditional market as mandated by my new regulations, the FAIR Plan must offer essential support to its customers.’ A massive rate hike goes against your promise to the people of California.”

While Lara was globetrotting, major insurance companies were restricting policies, cancelling policies, or entirely pulling out of California, pushing the state to the brink of collapse.

The real responsibility for California’s high insurance premiums lies in state politicians’ and the governor’s policy decisions and bad laws. Most insurers say because of California’s extremely high cost to rebuild, they can’t keep premiums artificially low any longer.

And why are California’s rebuilding and building costs so high? The California Environmental Quality Act, project labor agreements, federal, state, regional, and local agencies permitting, overlapping and conflicting regulations; and the agencies all have the power to halt building projects, allow a lawsuit, or rule change, require an entire new set of designs, and force and individual or builder to resubmit plans to every agency and start all over again.

“Recently, we learned that five carriers are reentering the California market,” insurance expert Stacy Korsgaden said in a recent Globe article. “While this is better news, the stark reality is, no matter how many companies return, we cannot thrive if the foundation of our state remains broken.”

And the carriers are all demanding rate increases, as well as Lara and the FAIR Plan, to what end?

Senator Alvarado-Gil implored Lara to honor his promise to the people of California: “I urge you to reject the FAIR Plan’s rate hike and commit to a more sustainable insurance future for all Californians.”