SACRAMENTO, California — Gov. Gavin Newsom signed a series of bills into California law on Thursday to prop up, expand and streamline the state’s property insurer of last resort, which has experienced dramatic growth as other insurers retreat from the wildfire-prone state.
What happened: Newsom’s (D) signature on AB 226, by Assemblymember Lisa Calderon (D), allows the FAIR Plan to get state-backed loans to cover some of its expenses if it runs out of cash. The measure is meant to give both insurance companies and policyholders some relief from having to cover the FAIR Plan’s claims, though it comes too late to avoid the FAIR Plan from having to tap other insurance companies and their policyholders to cover the billions in losses from the Los Angeles fires.
Newsom also signed the following bills:
Why this matters: The suite of bills, which was largely supported by both consumer advocates and the insurance industry, don’t represent sweeping changes — but they show that state politicians are keenly aware of the problem after several of the state’s top property insurers paused writing new policies in the state in recent years because of the growing wildfire risk. Newsom said in a press release the bills are aimed at “strengthening California’s insurance market to be more resilient in the face of the climate crisis.”
