Struggling to find affordable homeowner’s insurance because you live in a fire-prone area? A new proposal by state regulators could soon make it much easier to get coverage. But consumer advocates worry that it would also mean steep rate hikes for many Californians.. In exchange for allowing insurers to raise rates based on the growing threat of climate change — long an industry demand — companies would agree to expand coverage in parts of the state with the greatest wildfire risk.
Outside of those areas, insurance companies must also take many homeowners in more urban areas who are currently on the FAIR Plan. Consumer advocates, meanwhile, are pushing back hard on the proposed reforms, arguing that the use of catastrophe modeling would lead to unfair rate hikes through an opaque and potentially discriminatory process.
Insurance department officials refuted the claim, citing the agency’s authority to reject proposed rate increases and revoke the ability to use catastrophe modeling by companies that don’t follow through on their coverage responsibilities.