Editor’s Note: The following piece originally published on The Independent Center’s website and has been republished with permission from the organization.

The Los Angeles County wildfires are estimated to cost a staggering $250 billion, making them one of the costliest natural disasters in United States history. The California residents affected by the fires are now having to deal with a secondary disaster – insurance.  

Government Regulations Restrict Competition

Insurance – like death and taxes – is an unavoidable part of life. It behooves responsible adults to mitigate future risks with various kinds of insurance. For homeowners in Los Angeles, that means protecting themselves against wildfires. In Florida’s panhandle, it’s insurance against the ravages of hurricanes.  

In theory, consumers should be able to choose from a number of insurance policies based on their level of risk tolerance, income, assets, and other personal factors. In theory, there should be a number of insurance companies competing with one another to offer varying levels of coverage to consumers.  

However, in reality, heavy-handed government regulations limit choice and competition in insurance markets, which ultimately harms consumers.

Take California for example. The state government imposed strict rules and regulations on home insurance that they forced some companies out of the state, quite literally reducing homeowners’ choices. If state regulations make insuring homes unprofitable, then an insurer has one option – go elsewhere. The immediate effect of insurers leaving the market is less choice for consumers. The secondary effect is less competition between insurers. Both factors drive up costs for consumers.  

Independent Voters Want More Choices for Everything

Consumers and independent voters want more choice and competition. The Independent Center found in our, “We can do better” survey that a majority preferred more choices no matter the issue. In January of last year, we asked what do you “believe would make the government more effective?” A plurality responded, “reforming government programs to offer more choice with competition from the private sector.”

Every individual has different preferences and needs according to personal life circumstances. Governments typically offer one-size-fits-all solutions. Consumers overwhelmingly want more options to choose from. Indeed, voters went to the polls this November and chose President Trump, who they believed would offer more choices and competition.  

Insurance Markets Trending Towards Less Competition and Choice

Unfortunately, American insurance markets are seemingly on a path in the other direction. The market for health care insurance, for example, is headed towards less competition and less choice this year as it becomes more concentrated with fewer and fewer companies.

Consumers will bear the brunt of the heavy hand of government intervention into insurance markets with fewer choices, less competition, and higher prices. This is exactly the opposite of what voters wanted from this administration. But as independent voters who ultimately decide elections, we have the power to pressure our elected officials to change course. Our voices will be heard if we choose to speak up. Ignoring us will have consequences on election day.