Newsom, Legislature must not rush through huge changes to property insurance [The San Diego Union-Tribune]

San Diego Union-Tribune (CA)

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September is a scary time in the Capitol. As the Legislature hurries to finish its work before adjournment, state lawmakers have a history of making decisions on complex issues that come back to haunt Californians. The most notorious example came in 1996 when a botched energy "deregulation" bill was rushed into law with the encouragement of Gov. Pete Wilson. It directly led to the energy crisis that roiled the state in the winter of 2000-01.

Another daunting crisis now looms — depending on how Gov. Gavin Newsom and legislative leaders respond to growing fears about more insurers abandoning the state because they doubt their regulated premiums can cover the cost of future wildfires as the climate emergency worsens. Since Politico's Aug. 21 scoop that a far-reaching deal was near that may allow insurers to impose a de facto surcharge on all policyholders to cover the potential costs of policies of those with the riskiest property, there's been little hard reporting on what this could mean for the average Californian. Harvey Rosenfield — the activist who won passage of sweeping insurance reforms with Proposition 103 in 1988 — believes insurers are exaggerating their concerns and says industry profits remain substantial. But it's hard to buy that the spring decisions of State Farm, Allstate and Farmers to pull back from the nation's largest insurance market were a ploy. The San Francisco Chronicle's report Wednesday that a fourth major insurer — USAA — has similar plans is telling.

Obviously, it's crucial that California have a healthy property insurance market, especially as the state becomes hotter and drier. But given that lawmakers haven't taken some obvious steps to reduce fire risks — starting with a far more aggressive push to make parcel owners protect their land — any bold moves are premature. Given the secrecy over what's being considered, that's especially the case here.

This story originally appeared in San Diego Union-Tribune.