Affordable homeowners' insurance?

Assemblymember Marie Waldron

75th District

As vice chair of the Assembly Emergency Management Committee, I participated in a Joint Informational Hearing with the Assembly Insurance Committee on June 14. Discussions involved the current crisis facing the state’s insurance industry, specifically related to wildfires and the usefulness of Catastrophe Modeling to assess risks for homeowners.

Catastrophe modeling is a combination of modeling catastrophe footprint on exposures and linking them to insurance and reinsurance business activities. The process uses computer-assisted calculations to estimate the losses that could be sustained due to a catastrophic event, such as a wildfire or earthquake.

This technique can be useful in creating pricing and underwriting plans that recognize mitigation measures for individual properties, reducing premium increases and cancellations.

In addition to Assembly committee members, participants included representatives from California Office of Emergency Services (OES), representatives from the California Department of Insurance (CDI), the Acting State Fire Marshal, Cal-Fire, along with experts on Catastrophe Modeling, who were front and center at the hearing.

This is one of the most consequential issues facing California, especially in our fire-prone region here in San Diego County. Increased understanding of conditions that produce destructive wildfires need to be included in risk assessment. Modeling techniques similar to those used locally by SDG&E that accurately predict conditions likely to produce wildfires in any 24 hour period, should be implemented statewide.

Many constituents have contacted my office about ongoing insurance horror stories, including cancellations (my insurance has been canceled multiple times – I’ve been on the Fair Plan twice), and rate increases in the thousands of dollars – including increases for many HOAs. Some constituents reported their communities have not experienced a wildfire in over 50 years. Their neighborhoods were never identified as Very High Fire Risk Severity Zones until recently, but now they are. Why, what has changed?

Following the announcement of the Committee’s June 14 hearing, CDI announced a public workshop on July 7 to explore insurers’ use of risk assessment tools, including Catastrophe Modeling. Without changes, the housing market will crash, and so will our economy. The status quo is not an option.

To view my comments at the hearing, go to https://vimeo.com/839101821/6113dbb71c