Wildfire insurance crisis is a ‘waving red flag,’ Newsom says.

SACRAMENTO, Calif. — Gov. Gavin Newsom acknowledged California’s growing wildfire insurance problem Tuesday after lawmakers failed this week to reach a deal to shore up the market.

He called the retreat of home insurers amid rising climate disaster costs a “waving red flag” and compared California to Florida, where Gov. Ron DeSantis is also grappling with insurers leaving the state in the wake of costly weather events.

“This is not unique to us,” Newsom said during an interview with POLITICO at the California Museum in Sacramento. He invoked DeSantis and the sky-high insurance premiums paid by Floridians as well as Colorado Gov. Jared Polis’ effort to set up a property insurer of last resort. “This is the coming attraction in terms of impacts of climate.” […]

Newsom said administration officials have been meeting regularly on the issue but didn’t commit to a special legislative session or executive action.

Lawmakers failed to strike a deal on a bill in time for the end of the state’s legislative session Thursday, with talks falling apart largely over a clash between industry and consumer advocates.

Newsom said the negotiations “unfortunately” fell short.

“I say unfortunately, because time is of the essence,” he added.

State leaders acknowledged earlier Tuesday the rising frustration from residents struggling with insurance: State Farm, Allstate and Farmers announced pullbacks this spring, citing inflation as well as the increased risk of costly wildfires.

The insurer of last-resort has also been warning it could need bailing out because of all the risk it is now taking on. Newsom said he has a home on the plan, called the FAIR Plan, and said he was “intimately” familiar with the problem.

Assembly Speaker Robert Rivas (D-Hollister), who had been working to pass a bill, said Tuesday that the Assembly would hold a series of public hearings this fall focused on the access to insurance coverage, wildfires and catastrophes.

“We hear loud and clear from our residents that access to insurance is a problem,” Rivas said in a statement. “Our mission has always been to ensure homeowners and businesses across California can access and retain comprehensive insurance coverage.”

California Insurance Commissioner Ricardo Lara has broad authority to pass new rules, but stayed clear of committing to any immediate reform on Tuesday. He has said he wants to allow insurers to use forward-looking modeling that could raise rates in exchange for a guarantee they’ll stay in the state, but also stayed clear of committing to any major reform Tuesday. In a statement, he said the Insurance Department would change rules to streamline the Department’s rate review process — a longtime request of the insurance industry which has complained of delays in state approvals for rate increases.

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