Will this plan fix CA home insurance crisis?

Tens of thousands of California homeowners, especially those who live in areas at risk of wildfires, have lost their insurance or have to pay more to keep coverage. One after another, major companies have pulled out of the state, many citing the cost of claims.

For more than a year, politicians and policymakers have been trying to figure a way out of the crisis. On Wednesday, California’s insurance chief Ricardo Lara unveiled the latest details of his plan, writes CalMatters economy reporter Levi Sumagaysay.

Lara is pushing for insurers to cover homes in high-fire-risk areas. They can do this in one of three different ways:

Offer policies equivalent to 85% of their statewide market share in these areas;

Or increase their number of policies in high-risk areas by 5%;

Or take people off the FAIR Plan (the state’s overdrawn insurance plan of last resort) to increase their total number of policies by 5%.

While the state can’t legally compel insurers to offer homeowner or commercial property coverage, officials expect companies to comply so that they can take advantage of “catastrophe modeling” to set the rates they can charge. Insurers have been pushing for California to allow catastrophe modeling, which includes historical data and projected risk and losses, and is available in every other state.

At a press briefing, Lara said when insurers submit rate requests, they will also need to disclose which of the three options they will choose to cover high-risk areas.

Lara: “Insurance companies need to commit to writing more policies and my department will need to verify those commitments and hold them accountable.”

In a statement, Gov. Gavin Newsom praised Lara’s guidelines.

Newsom: “As the climate crisis has rapidly intensified, the insurance system hasn’t been seriously reformed in 30 years — this is part of our strategy to strengthen our marketplace and get folks the coverage they need.”

Insurance industry groups didn’t respond to the specifics of Lara’s plan, but did say they are committed to keep working with the department.

Prompted by the Legislature’s failure last year to pass a bill to fix the state’s insurance market, Lara has also proposed streamlining his department’s process for reviewing insurer requests. 

Lara has yet to release other parts of his overall insurance reform, including improving the FAIR plan and enabling insurers to include reinsurance costs in their premiums.

Read more about the plan in Levi’s story. It also includes a lookup tool by CalMatters data reporter Jeremia Kimelman so you can check if your neighborhood is covered.

From CalMatters higher education reporter Mikhail Zinshteyn:

California public university juggernaut UCLA has a new chancellor, a prestigious appointment to lead a campus that in recent months has been under the blistering watchful eye of U.S. lawmakers, students and reporters during protests, counterprotester violence and hundreds of arrests tied to the Israel-Hamas war in Gaza.

Julio Frenk will take the reins beginning Jan. 1 with a base salary of $978,904. Of that, $250,000 will come from private sources as a way to lift his pay beyond what state and tuition revenue would provide. UCLA’s current chancellor of 17 years, Gene Block, announced his retirement last year. The University of California Board of Regents voted to approve his appointment and salary Wednesday.

In a likely foreshadowing of the campus climate Frenk will inherit, the public comment period of the regents meeting mostly featured students furious with campus and university leadership over the arrest of more than 200 protesters in early May. About two dozen pro-Palestinian protesters were arrested this week in another round of demonstrations opposing the war and UC’s indirect investments in weapons manufacturers, plus companies and bonds with ties to Israel. Some students and faculty spoke out against campus antisemitism.

Frenk, whose Jewish father escaped Germany in the 1930s and relocated to Mexico with his family, said the campus needs to balance free expression, student learning and safety, echoing the message of UC leadership.

Frenk, at a press conference at UCLA: Students “need to have the environment that allows and enables the learning and the learning can include all the other activities but safety is a paramount consideration. Now, we do need to balance that with a very clear commitment to free expression.” 

“Freedom of expression should not, does not, include or protect harassment or discrimination,” he added.

Since 2016, Frenk has led the University of Miami in Florida, a private university with a student population that’s less than half of UCLA’s, which stands at about 46,000. He has a medical degree from National University of Mexico and a joint-doctorate degree in medical care organization and sociology from the University of Michigan. 

He’ll be UCLA’s first Latino chancellor.

Today the Legislature is expected to pass its placeholder budget while negotiations continue with Gov. Newsom. One sticking point: How much to invest in dams. 

As CalMatters water reporter Rachel Becker explains, in 2022 Newsom called for dam repairs as a key strategy to reinforce water supplies against climate change and drought, including $100 million in the budget for local dam safety projects and flood management.

But this year, facing a multibillion-dollar budget shortfall, Newsom wants to slash $50 million from that proposal. The Legislature kept that money intact in its budget plan.

Assemblymember Diane Papan, a Democrat from San Mateo and chairperson of the Assembly’s water, parks and wildlife committee: “This investment is the trifecta: It gives you public safety, because you don’t want dams breaking. It gives you climate resilience, and it will impact our water supply.”

California has more than 1,500 dams. Owned by cities, counties, utilities, water districts and others, dams help enclose floods, generate power and store water for cities and farms. But these dams are also old — more than a decade older than the national average, and more than 300 that are at least 100 years old. 

Because dams with safety deficiencies endanger residents living downstream, particularly during a storm or earthquake, state officials have limited the amount of water stored in 42 dams. If these are repaired, they could store enough additional water for 3.6 million people a year.

Learn more about which dams are vulnerable in Rachel’s story.

California’s 44 official symbols don’t yet include a state seashell. Assemblymember Diane Dixon has a bill for that — and it could get sent to the governor as soon as today. Find out which species and why from CalMatters politics intern Jenna Peterson.