Consumer advocate lashes out at insurers for "exploiting" CA wildfires

It also calls for insurers to make their rate-setting process more transparent

Consumer advocate lashes out at insurers for "exploiting" CA wildfires

Catastrophe & Flood

By Lyle Adriano

Consumer advocate group Consumer Watchdog has issued a statement accusing the insurance industry of “exploiting” the California wildfires for its own financial gain.

The group testified at a virtual hearing convened by California insurance commissioner Ricardo Lara. The group praised the hearing’s focus on “science-based home-hardening standards” that help reduce wildfire damage risk, and underlined that homeowners who follow these standards must be protected.

However, the group also took the opportunity to call out insurers which, it believes, have arbitrarily refused to sell or renew homeowners’ insurance coverage in California.

“Even as Californians’ homes burn down and unpaid claims pile up, insurance companies are leaving more homeowners without coverage and demanding the rest of the state pay unjustified premiums, exploiting the catastrophic fires to maximize their profits and minimize their responsibility to the public,” said Harvey Rosenfield, the author of Proposition 103, on behalf of Consumer Watchdog.

Rosenfield added that Californians who “do the right thing” to protect their homes and communities by adopting home-hardening standards must be protected from price gouging and community redlining.

“We can’t let the insurance industry regulate the people of California by determining where people can live, whether they can get a mortgage or stay in their homes,” he prefaced.

Consumer Watchdog also said in a release that it is rallying behind commissioner Lara’s call for transparency from the insurance industry about how fire risk is used to determine “fireline” scores that affect rates; called for insurance premium reductions for homeowners who take wildfire mitigation measures; and supported an investigation into whether insurance companies should be required to serve the entire California marketplace as a prerequisite for doing business in the state.

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