Why California’s Homeowners’ Insurance Market Collapsed – and How to Fix It
Ian Adams, ICLE Executive Director, is quoted in this Independent Institute article on the homeowners’ insurance market collapse and how to fix it. Read the full story here.
Research by the International Center for Law & Economics, based on data from S&P Capital, revealed that California ranks the worst in the nation in terms of regulatory rate suppression for both home and auto insurance. Despite the fact that California is a disaster-prone state, the average cost of homeowners’ insurance in the state, $1,250 per year, is well below the national average of $1,915.
According to the International Center for Law & Economics, the “deemer” clause has essentially been rendered moot because the CDI often requests that insurance companies waive this sixty-day timeline, a request for which it has significant leverage. If the CDI cannot complete rate applications in a timely manner, it can elect to move to a rate hearing, rather than allowing automatic rate approval to occur. If companies do not comply with CDI’s request to waive the sixty-day deadline, they will face a rate hearing, which will delay the process significantly.