CA lawmaker wants federal agency to investigate home insurance exodus
A California lawmaker is calling for a deeper look into the home insurance crisis in the state.
Two major insurers, Allstate and State Farm, have already stopped writing new homeowner's insurance in California saying it's too expensive to insure due to the wildfire risk.
A lot of homeowners' insurance companies are saying once policies are up, they won't renew, leaving many to go to the California FAIR Plan, which doesn't always have adequate or extensive enough coverage,
It's a real problem plaguing the state and Rep. Maxine Waters wants the Federal Insurance Office to investigate whether these claims are legitimate.
She says insurance companies have made money from collecting payments over the years, but when it becomes risky, they are just leaving.
"Millions of people have been paying premiums for many years and the insurance companies have invested those premiums, and they have earned a lot of money and the insurance companies are very rich because of their investments," said Waters.
"And so what they're basically saying is, despite the fact we've made a lot of money on those premiums that we didn't have to pay off on for many years, we're going to leave. And we're saying, no, that's not right…"
Waters is also looking into incentives for insurance companies, so they will start writing new policies again. She's proposing homeowners do a better job at clearing brush surrounding their homes and using more fire-resistant building materials – and even establishing areas that are unbuildable due to wildfire risk.
She acknowledged that insurance companies can't be forced to do business here, but she does want the Federal Insurance Office to investigate whether there are any anti-trust laws that have been violated.
And it's not just California that is dealing with the exodus. Hurricane-heavy Florida and Louisiana have also seen major insurers pull out of the marketplace in the past few months.
