Housing owners insurance tariffs to raise the California Fair

After saying that this will expire by March, the fire provider in the last period of fire in California will impose a special fee of $ 1 billion on home owners and insurance companies, with the first such move in more than three decades.

The State Insurance Department today approved a request from the Provider, the fair plan, to impose the fee and to ensure that it remains a solvent as it covers claims of victims of fires in Los Angeles County, said Commissioner Ricardo Lara’s order.

More than 400,000 customers of the plan are likely to see temporary fees added to their insurance accounts as part of the fee, known as an assessment – the first time, when the evaluation is imposed directly on customers, not just insurance companies.

The fair plan is a set of insurers required by the Law on the Provision of Fire Insurance to Property Owners, who cannot find insurance elsewhere. Its customer base has grown dramatically over the last few years, as insurance companies are increasingly refusing to write or renew policies in the country, citing an increased risk of fires.

Many victims of fire in LA have insurance through the fair plan. The residents of the Pacific Palisades, where thousands of structures burned last month held 85% More Fair Personal Policy in September than a year ago.

The valuation of the fair plan is La Fires insurance. State Farm, the largest Property Insurance Provider in California, recently requested permission to temporarily increase your premiums An average of 22% because of the allegations he is facing the fires. The insurance department is still considering this request.

The President of the fair plan It was warning Regarding his ability to pay claims in the event of a crash, telling the State Assembly Committee last year that the “one event away from a major assessment”. Plan spokesman did not respond to a request for comment.

As of February 9, the plan paid over $ 900 million claims, the commissioner’s order said.

It is not clear how long the honest plan will have to pay temporary fees or what percentage of their premiums will be based on fees.

According to the new provisions that have entered this year as part of Lara’s efforts to cope with the increasing difficulties in finding property insurance in California, customers of the fair plan will already have to take 50% of each assessment by a temporary fee added to their Premiums. Before the new rules came into force, the plan would receive the additional funds directly from the companies members who would then try to recover this money by raising premiums.

The insurance industry supports change. “This is essential to prevent even more tension of the already unbalanced insurance market in California and avoiding widespread policy, which would threaten the coverage for millions of Californians,” said Mark Sectan, Vice President of State Relations for the US Association for property insurance, in a written statement.

But the consumer guard, a consumer advocacy group, is considering judging the fact that consumers are now on the hook for additional funding for the fair plan.

“We will investigate every legal defense (consumers) legal option,” said Carmen Balber, CEO of the group, in front of Calmatters.

Balber added that some insurers, such as Mercury General Corp., said shortly after LA fires began in early January, expected to have adequate reinsurance to cover all possible increased contributions they would have to make in the fair plan. In this case, “Will the insurers leave the insurers and charge consumers (anyway)?” Balber asked.

The insurance department stated that the last time the state approved additional funds for the fair plan was in 1993, after the Kineroa fire in Altadena and Topang’s old fire in Malibu and Topanga. Some of these areas were also affected by fires this year. The additional funds approved afterwards are equivalent to $ 563 million today, the department said.

In a statement, Lara characterizes the new regulation as a “necessary consumer protection action”. The Commissioner added: “The fact that we are again faced with this issue of 30 years after the fires devastate the same communities, emphasizes the need for change.”