P&C Insurance Daily

Insurance Commissioner Ricardo Lara ordered insurance companies to preserve residential property insurance coverage for approximately 124,000 homes affected by wildfires in six Sierra foothill counties following Governor Newsom’s emergency declaration. The protection shields those living within the perimeters or adjoining ZIP codes from insurance non-renewal or cancellation for one year, with five major insurers including Mercury, CSAA, and USAA committing to stay and grow in wildfire-affected areas.

Total property and capital loss estimates for the Los Angeles-area fires range from $95 billion to $164 billion, with insured losses estimated at $75 billion as wildfires continue to demonstrate growing fire risks. Property markets remain a top concern for insurers heading into 2025 alongside cyber threats and climate-related challenges.

The California Department of Insurance announced enforcement actions against insurance companies for egregious delays in claims handling, unreasonable denials, and failure to conduct thorough claim investigations. Companies face monetary penalties up to $5,000 for each unlawful act or up to $10,000 for willful violations as the Department works to ensure policyholders receive fair treatment and timely payment of valid claims.

Property insurance costs in California increased 24 percent between 2021 and 2024, outpacing inflation and driving up household indebtedness and mortgage delinquencies among homeowners. The loss of available and affordable insurance in certain areas threatens community financial viability and limits mortgage availability, as lenders require insurance coverage to issue mortgages.

Insurance Commissioner Ricardo Lara proposed new regulations establishing stricter funding requirements for consumer advocacy groups that challenge insurer rate hikes under California’s landmark insurance law. The controversial proposal, which includes a public hearing scheduled for November 20, has sparked debate between consumer protection advocates and industry representatives regarding the impact on consumer representation in rate proceedings.