The two Democrats running for California insurance commissioner offer voters a stark choice for tackling a wildfire-driven home insurance crisis as premiums surge and insurers drop thousands from their plans: Can the state fix the private market, or should it step in with its own coverage?<\/p>\n
Jane Kim, a former member of the San Francisco Board of Supervisors, has centered her campaign on a proposed state-run disaster insurance program she says will lower costs and expand coverage, despite skepticism from some analysts and consumer advocates. Her opponent, Los Angeles state Sen. Ben Allen, calls instead for building on and improving current efforts to stabilize the state\u2019s home insurance marketplace.<\/p>\n
Dan Schnur, a political science professor at UC Berkeley and the University of Southern California, said the race pits a progressive in Kim, who he said is \u201cmuch more suspicious of big business,\u201d against a center-left Democrat in Allen, who he said seeks to closely regulate insurance companies but is \u201caware of the risk of driving them out of the state altogether.\u201d<\/p>\n
In the June primary, Kim won 27% of the vote, the most among all 11 candidates in the race for state insurance commissioner<\/a>. Allen came in second with 19%. The current commissioner, Democrat Ricardo Lara, is termed out.<\/p>\n The insurance commissioner leads the state agency that approves rate hikes for home and auto plans, investigates complaints against insurers and advances policies meant to keep insurance affordable and available. While many voters may be unfamiliar with the position, it has become an increasingly critical role as destructive blazes have upended California\u2019s home insurance market.<\/p>\n Citing the growing wildfire risk, insurance companies have repeatedly won approval in recent years to raise homeowner premiums while dropping policyholders across fire-prone parts of the state. Some of the largest insurers, including State Farm and Allstate, have even paused writing new home policies anywhere in California.<\/p>\n Insurers blame California\u2019s regulatory environment, established by a 1988 consumer advocate-backed voter initiative, Proposition 103, which created the elected commissioner\u2019s office that reviews providers\u2019 policy rate increases. Insurers have argued that the commissioner\u2019s office hasn\u2019t allowed them to price risks adequately, straining their ability to cover catastrophic wildfire losses.<\/p>\n A Republican candidate and insurance broker, Stacy Korsgaden, who ran on loosening state regulations, was eliminated<\/a> in the June primary.<\/p>\n Kim\u2019s solution is to drastically reduce the private sector\u2019s role in wildfire coverage. She calls for a public natural disaster insurance program that most homeowners would pay into, guaranteeing universal coverage for catastrophes such as wildfires and floods.<\/p>\n \u201cThe system failure has reached a pain point for voters,\u201d Kim said. \u201cPeople are tired of going down this pathway, and what we\u2019re proposing is to rethink the system.\u201d<\/p>\n Kim said putting the state in charge of disaster coverage would allow it to invest a portion of the premium revenue collected in wildfire mitigation. She cites a similar program in New Zealand<\/a>, which officials there describe as a success but critics warn could face funding challenges in the years ahead.\u00a0Kim said her proposal would require further study, but said removing the profit motive from disaster insurance would, over time, lower premiums for many homeowners\u00a0\u2014 though no other state has tried a comprehensive universal disaster program.<\/p>\n In addition to the disaster plan, homeowners would need to pay for separate private insurance for general home coverage.<\/p>\n Kim\u2019s critics, including some consumer advocates, contend the program would saddle the public with the greatest liability, warning of potential taxpayer bailouts after large disasters. They also note the program would need state lawmakers\u2019 approval and likely require tens of billions of dollars to launch. Kim says the state could raise the money in part through fees on insurance companies.<\/p>\n \u201cOne state cannot scrap the current system and build disaster insurance,\u201d said Amy Bach, executive director of United Policyholders. This nonprofit consumer advocacy group has not taken a position in the race.<\/p>\n Kim, a key strategist in Bernie Sanders\u2019 2020 campaign, joins a slate of progressives on general election ballots across the country, led by Michigan U.S. Senate candidate Abdul El-Sayed. Left-wing candidates, emboldened by last year\u2019s election of New York Mayor Zohran Mamdani, see this November as an opportunity to capitalize on voter frustration over affordability and what they see as growing distrust in mainstream candidates.<\/p>\n \u201cPeople are hungry for real progressive change,\u201d said Jorge Contreras, California director of the progressive Working Families Party, which has endorsed Kim. She previously served as the party\u2019s California director.<\/p>\n Kim, who has also won Sanders\u2019 endorsement, has raised about $1 million for her campaign. Her top donors include unions for teachers, nurses and service workers. An independent campaign committee sponsored by the California Chamber of Commerce has spent $1.5 million to oppose her.<\/p>\n Allen, who reaches his term limit as senator this year, and his allies say he also shares progressive values. They point to his work authoring a $10 billion climate bond that voters approved in 2024, as well as consumer protection bills, including legislation<\/a> on Gov. Gavin Newsom\u2019s desk to bolster penalties for insurers that violate state insurance regulations.<\/p>\n Still, Allen agrees with Kim\u2019s critics who say her proposal for a public insurance program is unworkable.<\/p>\n \u201cWhat we need is a real plan that\u2019s actually grounded in the problems facing the system right now,\u201d he said, adding Kim\u2019s proposal \u201cwould take years to implement\u201d and \u201cbankrupt the state.\u201d Kim responded to such criticisms by acknowledging the state would phase in the plan in stages to ensure financial stability. She added that investing in wildfire mitigation would lower the overall fire risk, in turn keeping claims paid by the program in check.<\/p>\n Former state Insurance Commissioner Dave Jones, who has endorsed Allen, said the senator\u2019s experience in the state legislature would be crucial for working with lawmakers, consumer advocates and insurers to carry out his policies as commissioner.<\/p>\n \u201cHe\u2019s proven time and time again his ability to move very hard-fought, heavily opposed but important legislation,\u201d Jones said.<\/p>\n Allen said one of his main priorities would be expanding the state\u2019s wildfire mitigation programs, including grants for homeowners and neighborhoods to clear vegetation and make fire-risk properties more insurable. Allen said new funding should come not only from the state, but also from insurance companies, utilities whose equipment has sparked recent blazes and fossil fuel companies contributing to climate change. He acknowledged securing that funding would need legislative approval, as the state faces a long-term budget deficit.<\/p>\n \u201cAt the end of the day, what\u2019s really going to move the needle is great focus on individual and community-wide resilience,\u201d he said.<\/p>\n Allen also supports continuing a plan by the current commissioner that lets insurers use climate change models to justify rate increases to state insurance regulators. In exchange, insurers must agree to write more policies in high-fire areas.<\/p>\n Consumer advocates, however, have raised concerns the plan lacks teeth to require insurers to expand coverage. They also say the complex climate models, which advocates describe as a \u201cblack box,\u201d could lead to steep rate hikes across the state.<\/p>\n Allen said he his open to reviewing the plan and is committed to making sure insurers expand coverage, but did not provide specific details about how he would do so. He said he would use a climate model being developed by the state<\/a> to gauge whether insurers\u2019 models are fair and accurate, and use the commissioner\u2019s regulatory authority over rates to prevent out-of-control increases.<\/p>\n