San Bernardino County supervisors are urging state officials to declare a statewide state of emergency due to the ongoing reduction of insurance services in California.
On June 25, the Board of Supervisors voted unanimously to pass a resolution requesting California Insurance Commissioner Ricardo Lara, Governor Gavin Newsom, and the State Legislature to declare a state of emergency. This measure aims to reinforce and stabilize the state’s insurance market.
If declared, the state of emergency would prevent insurance companies from canceling existing homeowners’ policies.
This resolution follows the decisions of major insurers like State Farm and Allstate to scale back their operations in California.
Last year, State Farm announced it would cease accepting new insurance applications for both business and personal property in the state.
Recently, State Farm’s California subsidiary, State Farm General, submitted a proposal to the California Department of Insurance to increase insurance rates for homeowners, condo owners, and renters.
Other insurers, including Allstate and Farmers Insurance, have also declared intentions to reduce their business activities in California.
The swift decline in the number of insurance providers serving California residents has forced many new and existing homeowners to rely on California’s FAIR plan for coverage. While this plan covers basic hazards, it is considered a “temporary safety net” and was never intended to replace the comprehensive coverage that insurance companies typically offer.