California to Offer Insurers More Leeway to Set Rates for Fire Risk
- Executive order would require companies to offer more coverage
- High-profile insurers have stopped issuing new policies
This article is for subscribers only.
California’s insurance commissioner announced a new regulatory plan backed by the industry that would allow insurers to factor future climate risks into their pricing and require them to offer more coverage in fire-prone areas.
The announcement on Thursday, bolstered by an executive order from Governor Gavin Newsom, came after several major insurers, including State Farm General Insurance Co. and Allstate Corp., said they would stop issuing new homeowner policies or renewing existing ones in a state that has been ravaged by wildfires in recent years. The insurers argued that California’s current rules, which limit their ability to use predictive models and curb rate increases, made it too costly to cover homes.