California's legislative session ends Thursday, with one big piece of business left unfinished. There will be no compromise or plan to keep insurance companies in the state.
As the financial risk from wildfires and other natural disasters grows, several prominent insurance companies are not issuing any further homeowners policies, even fleeing the state entirely, shutting down most operations in California.
The state legislature had attempted to strike a deal but failed. What is stalling agreements?
Karl Susman, president of Susman Insurance Services, tells KNX News it's many things, but to summarize, between record inflation and intense weather patterns, "We have legislation that was written back when I was a teenager - preventing the industry from being able to innovate and keep up with these changes."
Susman said because of the lagging legislation, insurance companies can't price appropriately for different risks, which prevents them from making a profit, and as Susman puts it, "You can't keep selling something and losing money on it."
KNX News has made many attempts to reach out to California's Insurance Commissioner, Ricardo Lara for a statement on what the government is doing to fix this issue, but he has yet to respond.
Susman said the most recent communication from the Commission's office was that "The home insurance market is the top priority across state government right now."
What can be done now that the session has ended? Susman said, "I'm hearing that even though the session has ended and they're going on recess now, the governor is not turning away the idea that there might be a special session called."
For now, Susman believes that within the next 30 days, either the Department of Insurance or the governor's office will come out with a sort of 'band-aid' that everyone can tolerate temporarily until another session in Sacramento yields something more permanent.
Follow KNX News 97.1 FM
Twitter | Facebook | Instagram | TikTok