From the way they’re acting, it’s clear Gov. Gavin Newsom and state Insurance Commissioner Ricardo Lara believe they have no choice other than caving in to insurance industry blackmail. Or maybe it’s extortion.
Either way, these two supposedly strong and independent officials have been working steadily this year to enrich insurance companies. When State Farm announced a 30 percent hike in property insurance rates, neither elected official blinked. The same when Allstate and others announced even larger rate increases.
Newsom, at least, has the grace to gripe about inflation at the same time he’s helping cause it. Lara doesn’t even mention the fact that astronomically higher homeowner and business property insurance premiums create burdens on individual citizens just as much as seemingly unending increases in grocery prices. Here’s the nature of the blackmail/extortion these men face: Insurance companies are steadily canceling more and more property insurance policies in known wildfire areas because, they say, the risks of writing or continuing that kind of coverage in those places are simply too high.
Never mind that they have always in the past written such policies, making strictly local price increases when risks and replacement costs rose. If they now won’t write insurance, homeowners are forced to turn to the state Fair Plan, California’s insurer of last resort, where rates are much higher than even the companies charge. Newsom, who pushed unsuccessfully .