California’s Fire Insurance Woes Ignite Political Reckoning

The slow-motion collapse of California’s wildfire insurance market is about to force a political reckoning.

Lawmakers, regulators and Gov. Gavin Newsom are all preparing to absorb some political pain after years of trying to keep insurance premiums affordable even as catastrophic wildfires cost insurers billions. They’re nearing a legislative deal that could let insurance rates rise in an attempt to woo insurers back to the state -- and prevent more of them from leaving.

‘We turned a corner,’ said state Sen. Susan Rubio (D-Baldwin Park), chair of the Senate Insurance Committee. ‘We’re, all of us, in a strange way, on the same page.’


Lawmakers are talking about introducing a bill in time to speed it through the end of California’s legislative session in mid-September. Potential ingredients include allowing insurers to charge all policyholders a fee to cover the riskiest properties and letting them use forward-looking rate models that incorporate expected increases in natural disasters.