American Property Casualty Insurance Association: California's Property Market is Struggling, But Coverage Remains Available

SACRAMENTO, California, May 29 (TNStalk) -- The American Property Casualty Insurance Association issued the following statement on May 27, 2023:

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The following statement by the American Property Casualty Insurance Association (APCIA) is in response to State Farm's announcement that they will no longer write new property insurance policies in California. This statement can be attributed to Mark Sektnan, APCIA vice president for state government relations.

"The reality is inflation has increased the cost of every aspect involved in an insurance claim. It is costing more and taking longer to rebuild homes after a covered loss. The California Department of Insurance (CDI) is working with insurers towards achieving adequate rates and making other market improvements because the admitted market continues to struggle with inadequate rates that don't cover the increased risks caused by climate change and the growing number of communities in wildfire-prone areas.

"California insurers operate under an outdated 1988 statute and regulatory structure that does not allow them to adapt to 2023 climate-change created increased risks.

"To expand market capacity and availability of coverage for consumers and businesses, insurers need greater stability and regulatory flexibility to navigate the current difficult market conditions and manage rapidly evolving risk, including potential solvency-related threats. The first step is making sure insurers can charge rates that reflect the increasing risk of loss. CDI is working on this. Next, we need to allow admitted insurers to include the cost of reinsurance in their rates and use forward-looking probabilistic models to accurately assess future risk. Finally, we all have one common goal: mitigate properties and reduce the risk.

"Insurance is a vital economic safety net; we must work together to provide consumers and businesses with the insurance coverage they need. Insurers are committed to California, and we look forward to working with CDI and policymakers to enact real solutions so the Golden State can have a functioning and thriving insurance marketplace that benefits policyholders."

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The American Property Casualty Insurance Association (APCIA) is the primary national trade association for home, auto, and business insurers. APCIA promotes and protects the viability of private competition for the benefit of consumers and insurers, with a legacy dating back 150 years. APCIA members represent all sizes, structures, and regions--protecting families, communities, and businesses in the U.S. and across the globe.

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Original text here: https://www.apci.org/media/news-releases/release/76132/