Scant "UNFAIR Plan"
Policy is the Most Insurers Would Have to Sell
LOS ANGELES, May 16, 2024 /PRNewswire/ -- In a consumer alert
video released today Consumer Watchdog warns that a low-benefit,
high-cost, FAIR Plan-like policy is the best homeowners can hope to
get from Insurance Commissioner Ricardo Lara's deal with the
insurance industry.
Consumer Watchdog Executive Director Carmen Balber says in the
video: "California Insurance Commissioner Ricardo Lara cut a deal
with the insurance industry, one that he says will get them selling
more home insurance in California. But internal documents Consumer
Watchdog obtained under the Public Records Act show that the deal
is a Bait and Switch on consumers that won't get a single new
homeowner covered."
Watch the video "Consumer Alert: Commissioner Lara's UNFAIR
Home Insurance Deal"
Insurance Commissioner Ricardo Lara announced a plan in
September that would give insurance companies the deregulation they
want in return for a "commitment" by insurance companies to start
selling in risky parts of California again.
However, documents uncovered by Consumer Watchdog reveal that
insurers would be allowed to meet their commitment by offering the
same high cost, limited benefit coverage that homeowners are
already guaranteed access to in the FAIR Plan today. The documents
contain the text of the plan Lara negotiated in August that
was the basis for his September agreement with the insurance
industry.
Commissioner Lara testified before an Assembly Insurance
Committee oversight hearing yesterday afternoon but did not
disclose the type of policy insurance companies would be allowed to
offer.
The consumer alert video asks, "Why is that bad?" The
answer:
"FAIR Plan policies cover so little that homeowners have to buy
a second insurance policy to fill in the gaps.
"What's missing from a FAIR Plan policy?
"Standard home insurance and the FAIR Plan both cover things
like fire, smoke and lightning damage. But to add things like
windstorm, hail and vandalism, you'll have to pay the FAIR Plan
extra. All these things are included in the price of a standard
policy. And the FAIR Plan doesn't even offer many things that most
people expect from their home insurance. That includes theft,
falling trees, the weight of snow and ice, non-flood water damage,
glass breakage, liability, and the list goes on.
"Commissioner Lara is giving the insurance industry everything
it wants in return for a false promise to start selling in
California again."
The Consumer Alert ends with a call for real solutions: A
mandate that insurance companies cover Californians who meet
state-mandated guidelines for home-hardening and brush clearance to
protect their homes from wildfires.
Read more about the loopholes in the Commissioner's plan.
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SOURCE Consumer Watchdog