California home insurance crisis: State watchdog demands action

SACRAMENTO, Calif. — A new report is calling on the state to do more to help fix the ongoing homeowners insurance crisis in California. The Little Hoover Commission, a bipartisan watchdog agency for the state, released the report this month.

Some of the recommendations in the report include developing catastrophic modeling regulations, requiring insurers to recognize mitigation efforts when setting rates, and defining standards for mitigating fire risks. 

Some of the regulations are already being implemented by the California Department of Insurance.

“Why these forward looking models are critical to help inform what the future of California is gonna look like under now, extreme heat, under sea level rise,” Insurance Commissioner Ricardo Lara said in September during an ABC10 “To the Point” special investigation.

The report calls out Commissioner Lara for not showing up to discuss the recommendations with the commission. Instead, the Department of Insurance tells ABC10 a letter was sent in Lara’s place saying that he’s implementing these same recommendations in his ‘Sustainable Insurance Strategy.’ Earlier this month, the commission held a meeting and discussed the changes.

“(An) independent panel of experts to review the design and use of these models could provide stronger oversight and transparency here,” said Tamar Foster, Deputy Executive Director with Little Hoover.

Nonprofit Consumer Watchdog agreed with many of the recommendations from the commission, and also called out Commissioner Lara for not cooperating with the commission.

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