California lawmakers failed to fix the insurance market. So what comes next?

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Despite agreement that the California insurance market needs fixing, legislators weren’t able to find a compromise this session.

A house burns on Platina Road at the Zogg Fire near Ono in 2020. Photo by Ethan Swope, AP Photo

The rippling consequences make it more difficult to build new homes, because of a lack of insurance options, as California tries to climb out of a severe housing shortage. It also imperils the state’s FAIR Plan, which offers limited insurance to homeowners who cannot secure a plan through a private insurer. The FAIR Plan is funded by a levy on insurance companies, so it faces insolvency as they leave the market and more customers are pushed into the program.

 

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