UPDATE: U.S. Representative John Garamendi has issued a stark warning to Californians, claiming that home insurance companies are exploiting residents in the wake of natural disasters. During a panel discussion webinar hosted by Unlocking America’s Future on October 25, 2023, Garamendi criticized regulators for their lack of action against these practices.
Garamendi highlighted a troubling trend: insurance companies prioritize profits by “paying as little, as late as possible.” He stressed that claims denial is an ongoing issue, recalling his first experience with it during the 1991 Oakland Hills fire. The former state insurance commissioner expressed deep concern over the current commissioner, Ricardo Lara, who he believes has not adequately protected consumers.
With Lara facing calls for resignation from wildfire victims, Garamendi stated, “Without that as the principal marching order every day… consumers are going to be on the short end of this.” He emphasized that the role of insurance commissioner is one of the most challenging in California, second only to the governor.
Garamendi called on residents impacted by rising premiums and inadequate coverage to take action. He urged them to report issues to the California Insurance Commissioner and enforce the Fair Claims and Practices Act. “Put together a clear attack on the insurance industry,” he advised.
Next year, California will elect a new insurance commissioner. Garamendi revealed that several candidates have already approached him for support, and he has challenged them to demonstrate their commitment to consumer advocacy. “The bottom line is the current commissioner has failed his obligation,” he declared.
The urgency of the situation was echoed by Kyle Herrig, who opened the call, revealing that insurance premiums have soared in recent years while insurers reject claims at alarming rates. “Companies are making billions in profits with zero consumer protections,” he stated.
Panelist Elisa Jacobs Nixon, an actress from Altadena, shared her personal ordeal. Her community suffered devastating losses in recent wildfires, and despite being insured by State Farm for over 40 years, she has yet to receive coverage. “We are living in a daily, exhausting adversarial process which has become a second full-time job for me,” Nixon lamented.
Martin Weiss, developer of the Weiss score for insurance firms, identified six tactics used by insurers to avoid payments. He noted that companies in California are increasingly refusing claims for smoke damage and are even opting not to renew policies. “The cause, in our view, is a deliberate strategy by the insurance companies,” Weiss asserted.
This urgent situation demands immediate attention as consumers continue to face uphill battles with their insurers. With the election for a new insurance commissioner on the horizon, Californians are encouraged to stay vigilant and advocate for their rights.