In September, Gov. Gavin Newsom issued an Executive Order taking emergency regulatory action to bring some stability to California’s home fire insurance market. This is particularly important to homeowners living near our Southern California hillsides. Newsom’s action came after he and State Insurance Commissioner Ricardo Lara failed to negotiate a deal to keep home fire insurance carriers in California. An ongoing problem that Newsom could have begun resolving in 2022 when a bill addressing this very issues was on his desk. More on that in a moment.
If you own a home almost anywhere in California, you are all too familiar with how California’s insurance crisis exploded after a wave of devastating wildfires in 2017 and 2018 causing billions of dollars in damages. Many insurance companies dropped tens of thousands of policyholders residing in what is known as wildland-urban interfaces. Homeowners were then required to pay sometimes up to two and three times as much for alternate coverage.
The truth is Governor Newsom had an opportunity to act on this issue a year ago when he received a proposed law that I had authored while representing many of you in the State Assembly. Assembly Bill 2450 in 2022 would have required the California Department of Insurance to evaluate a meaningful way to lower fire insurance costs for home and property owners in high wildfire-risk areas. This legislation receiving unanimous support from both Democrats and Republicans and not a single no vote. To the detriment of California homeowners, Governor Newsom vetoed the bill.
If Governor Newsom would have taken this issue more seriously a year ago, we would now be one step closer to expanding insurance coverage and reducing the cost of living for residents seeking relief. He likely wouldn’t have needed to issue his Executive Order. Instead, Newsom wrote a veto message for AB 2450 in September 2022 that a “statutory mandate” was not necessary.
Newsom chose poorly and went the negotiation route instead, leaving California homeowners on the hook and at risk when he had a strongly supported solution in front of him just a year ago.
That isn’t problem solving, rather his lack of action made the problem worse for homeowners. But this is not personal to our Governor, we see this pattern repeat all through our political process. My approach and mindset has always been different, modeled after that sign former President Reagan had on his desk in the Oval Office, “There is no limit to what a man can do or where he can go if he doesn’t mind who gets the credit.”
Given Newsom’s recent action after failed negotiations, I can’t help but wonder if he remembers the opportunity, he had last year to begin resolving this problem? I won’t hold my breath, but I want to make sure that California homeowners do, because it highlights the fact that California doesn’t need to be in the trouble it is in. There are solutions, and elected representatives who are working to fix our state and bring down every element contributing to the cost-of-living spike that has afflicted California over the last decade.
We can resolve our issues, but this example of Newsom’s bungled action on fire insurance demonstrates what happens when ego gets in the way of what is in the best interest of the people. During my term in the State Assembly, many families reached out to me to share their stories of how rising fire insurance costs have forced them to tighten their budgets and forego other basic necessities. It broke my heart, it’s unacceptable, and the state had to do more. Assembly Bill 2450 was a first step in getting us back on the right track. Our governor chose the negotiation route, that failed, and now was forced to take action. Let’s just hope he learns from this mistake and that we all continue to demand action on this fire insurance crisis and lowering our overall cost of living.
Suzette Valladares, is a former Assemblywoman who previously represented the North LA County region of Santa Clarita. She now resides in Acton, CA, with her husband, daughter, and two German Shepherds.
