A consumer group is warning that homeowners could pay billions more for their home insurance under what it calls an “insurance industry legislative attack on California’s effective rate regulation.”
Assembly Bill 2167 would allow homeowners insurance companies to hike rates as high as they desire by exempting them from the protections of California’s rate regulation law, voter-approved Proposition 103, according to Consumer Watchdog.
The legislation made its way through the Assembly Appropriations Committee late last week and is headed for action on the Assembly Floor.
Consumer Watchdog is arguing that AB 2167, authored by Anaheim Assemblyman Tom Daly, would override Proposition 103’s protections against unnecessary and unjustified rate increases.
“Under cover of darkness, in the midst of a pandemic and civil protests, the insurance industry is pushing through the California legislature a plan to loot California homeowners and renters,” Harvey Rosenfield, the author of Prop 103 and founder of Consumer Watchdog, said in a statement. “At a time when homeowners can least afford it, the insurance industry should not be able to buy its way out of accountability to the elected insurance commissioner for the rates it charges.”
The two largest insurance trade associations, representing most property/casualty insurers operating in California, argued that the bill provides homeowners more choices in the face of increased wildfire threats in the state.
They made the following statement after the California State Assembly hearing on AB 2167:
“The prolonged wildfire threat spurred by climate change has changed the California landscape and challenged the availability of insurance in high fire-threat regions. AB 2167 strikes a balance that provides homeowners in wildfire zones access to more choice and competition among insurers based on price and coverage while avoiding costly and more limited FAIR Plan coverage. This bill upholds existing consumer protections by ensuring rates are reviewed by the Insurance Commissioner and allows for transparent consumer review of rates.”
Consumer Watchdog was joined by Insurance Commissioner Ricardo Lara, Consumer Federation of California and United Policyholders in opposing AB 2167.
Topics California Carriers Legislation Wildfire Homeowners Market
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