Thousands of people across California are scrambling to find new homeowners insurance because State Farm and several other companies are dropping policies. The companies say it doesn't make sense to do business in the state anymore because of strict regulations and also the increasing threat of wildfires, floods and other natural disasters.
U.S. Representative of the 49th District Mike Levin signed and sent a letter Thursday to the Federal Insurance Office and the National Association of Insurance Commissioners in response to premium rate hikes and non-renewals asking for more details on how climate change impacts those decisions.
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According to the letter, Levin and other members of Congress are asking the FIO and NAIC to work with state insurance regulators to collect data "to monitor climate risk in the property insurance industry." The letter goes on to detail the impact this information will have on insurance for homeowners across the country as it pertains to the impact of climate change.
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"I want to know to what extent climate-related events and the climate crisis is impacting these rising insurance rates," Levin said.
According to Levin, it's a push to make sure everybody across San Diego and across the U.S. has access to affordable homeowners insurance.
"I hear from a lot of our constituents, specifically throughout the coastal communities and those that are exposed to the wildlife, more prone to wildfires, that they are going up precipitously," Levin said.
Last month, State Farm announced it would discontinue coverage for 72,000 homes and apartments in the state, including for hundreds of policyholders across San Diego County. San Diego insurance broker Paul Scalone says it's putting local homeowners in a bind.
"When people reach out, they’re in frantic mode, a little bit chaotic, right? Because some of these people have had the same carrier for 20, 30 years. They’ve had no claims," Scalone said.
For those who find themselves in that position, he recommends this:
”If you find somebody that is able to get you a policy that is going to work for you, move on that quicker than let's say the policy non-renews," Scalone said.
In the meantime, if it's fire or floods that keep insurance companies from issuing new policies, Levin is asking these insurers to provide details backing up their reasons for non-renewals and policy rate hikes. The letter calls for all states to submit data on how climate change impacts the insurance market. For states that don't participate and submit data, Levin urges the FIO to use its subpoena power to obtain that data.
"I think with that data, Congress will be able to come together and hopefully make better public policy, better informed public policy, as we seek to address rising insurance rates," Levin said.
