Louisiana and Florida area already scrambling to keep their industries alive, but is California next?
As premiums have been rapidly climbing in various parts of the industry in California, experts are starting to wonder if it will be the next state facing a homeowners insurance crisis.
State legislators are pushing Commissioner Ricardo Lara to take action to support residents.
Condominium policy premiums have been climbing particularly fast in the state. A number of state legislators have written to Insurance Commissioner Ricardo Lara in a push to take action to support Californians struggling to find coverage they can afford. There is a growing concern that California could find itself joining Louisiana and Florida as states struggling with an insurance crisis.
“As you know all too well, the homeowners’ insurance market in California is experiencing severe disruption due to increased climate-related risks, particularly wildfires,” read the letter to Lara which was signed by 18 California state senators. “Homeowners association (HOA) communities and residents of condominium developments in wildland-urban interface (WUI) areas of the state are facing particular difficulty accessing coverage because of the high concentration of risk.”
Condo owners are experiencing serious challenges finding coverage in what threatens to be an insurance crisis.
Californian condo owners are finding it increasingly difficult to find the coverage they need at an affordable price. Some carriers in the state are refusing to renew policies. Other carriers have spiked premiums while simultaneously reduced the amount of coverage the policies provide.
“Constituents have reported special assessments of thousands of dollars per year, and in some cases, premiums of nearly $1,000 per unit, per month just to maintain the master policy of their housing development,” wrote the legislators in the letter to Lara. “This is an untenable situation, potentially affecting millions of California homeowners.”
The solution they are seeking to correct this issue and prevent an insurance crisis is to have the California Department of Insurance boost the California FAIR Plan commercial coverage limits from the current $8.4 million to $20 million. That plan is a pooled risk program supported by all property insurance with a license in California.