Pier Fire in California
Credit: DOI
Arguments without foundation used against common-sense legislation
June 1, 2018 - SACRAMENTO, Calif. - Insurance Commissioner Dave Jones on Thursday shot back against the insurance industry's all-out assault against SB 897, authored by Senator Mike McGuire (D, Healdsburg), which would require insurance companies, in the event of a total loss during a declared disaster, to offer policyholders 80 percent of their contents coverage without a detailed inventory.
"Insurers opposing SB 897 have shown their true colors in efforts to defeat this common-sense legislation-their priority is profit over the needs of their policyholders who have been through hell," said Insurance Commissioner Dave Jones. "This is about doing the right thing to help wildfire survivors begin the recovery process without putting them through more heartache and pain during one of the most difficult times in their lives."
More than one-third of total loss claims from 2017's devastating fires were with insurance companies that offered at least 80 percent of contents coverage to their policyholders without requiring them do an inventory.
The industry's sky-is-falling rhetoric about massive rate hikes for policyholders is untrue and they know it. Less than 1/10of 1 percent of the more than 8 million homeowner policies in California suffered a total loss in last year's fires. Furthermore, thanks to Proposition 103, insurers are not allowed to unilaterally make rate hikes - they must go to the Department of Insurance and make their case with facts and actuarial data, not just rhetorical flourishes.
"We have always known that we would have a massive fight on our hands due to the deep pockets of these multibillion dollar corporations, and I have always said I would never compromise if it meant serving up a bad deal to the thousands who are struggling to rebuild their homes and lives," said Senator Mike McGuire. "We took numerous reasonable amendments leading into these latest discussions, but we had to draw the line when insurance corporations insisted on amendments that would have watered down the bill close to useless. Quite frankly: The deal that was put on the table harms those who are struggling to recover, now, and all future homeowners who would be impacted by California's new normal."
The insurance industry needs to take a step back and reexamine SB 897 honestly and on its merits-it's a common-sense solution to provide all policyholders with the peace of mind insurance is meant to provide.
Note: The percentage calculation is based on the total loss numbers 6,655 from the 2017 fires divided by 8 million, the estimated number of homeowner policies in California.
Source: CPRB
Related Information: California Insurance Commissioner Vows to Fight Industry Assault on Proposed Solutions to Protect Wildfire Survivors
