Due to the Park Fire and other active wildfires, there will likely be thousands of insurance claims. As CalMatters economy reporter Levi Sumagaysay explains, a deal announced Friday between the California Insurance Department and the state’s insurance option of last resort could mean better coverage but higher prices for policyholders.
The FAIR Plan has seen its rolls more than triple — from about 127,000 in 2018 to 419,500 last month — because property owners are seeing fewer options for fire insurance. Amid this growth, FAIR Plan policyholders have complained about high prices and limited coverage. The new agreement addresses the coverage complaints by requiring the plan to offer policies with higher coverage limits of $20 million per structure and $100 million per location, which could include more than one structure.
But the increased coverage will come with a catch: Insurance companies could ask the Insurance Department for approval to collect “temporary supplemental fees” from their existing policyholders.
Currently, the FAIR Plan’s member insurers would be on the hook if the plan is unable to pay claims in case of a catastrophe. The insurance companies would then try to recoup their costs by charging higher premiums later. But under this agreement , the insurers would be able to collect fees preemptively — before the plan runs out of money — from FAIR Plan policyholders who opt for the coverage with the higher limits.
Jacob Frank, a spokesperson for the FAIR Plan, said the program intends to submit a rate filing for the new policy with the increased coverage limits within 120 days. The amount of fees passed on to individual policyholders would depend on how much the FAIR Plan and insurers request, Insurance Department spokesperson Gabriel Sanchez said.
Insurance Commissioner Ricardo Lara framed the deal as part of his broader effort to fix a crisis caused by insurers leaving the state or refusing to write new policies, citing the growing risk of wildfires.
Advocacy group Consumer Watchdog, meanwhile, called the deal a bailout. “It’s a huge reach for the commissioner to assert he can force consumers to pay for FAIR Plan losses,” said executive director Carmen Balber. Balber added that her group is “looking into the legalities” of the plan. Sanchez’s written response: “People will have opinions and they are free to voice those opinions.”
Reinforcements on the way: Nearly 4,000 personnel have been dispatched so far to help battle the Park Fire. But as wildfires become bigger and more unpredictable, California will need more firefighters. As CalMatters’ Adam Echelman explains, firefighting apprenticeships have been one of the state’s most popular apprenticeship programs , with nearly 18,000 joining firefighting apprenticeships since January 2019. Often, trainees must pass grueling training programs — carrying ladders and hoses in over 100-degree heat while wearing heavy uniforms and oxygen tanks. Learn more about these firefighting programs in Adam’s story.
Anniversary drive: As of this month, CalMatters has now provided Californians with unbiased, independent news for 9 years. Please join us today with either a tax-deductible gift or by telling your community why reading our free newsletters (like this one!) has helped you. Every act of support allows us to keep fulfilling our mission. Read more about us from our engagement team.
Other Stories You Should Know
Pay hike starts for some health care workers
A doctor listens to a patient’s heartbeat at the Mountain Valley Health Center in Bieber on July 24, 2019. Photo by Anne Wernikoff for CalMatters
More than nine months since Gov. Newsom signed a law to boost the hourly wages of health care workers to $25, the rollout has been uneven — with some employees already receiving their raises while others still await theirs, writes CalMatters health reporter Ana B. Ibarra .
Chas Kelley, a clinical nursing assistant, is among the 1,000 unionized San Bernardino County workers who got a raise after their union pressed the county. He said he’ll use the extra cash to help pay for his monthly expenses: “We have to put a roof over our heads. We’ve got to put food on the table.”
Not all health care workers are eligible, however, such as some employees at small private practices and medical groups.
The bill would require an insurer’s provider directory to be at least 60% accurate by July 1, 2025 and 95% accurate by July 1, 2028. Insurers would face fines if they don’t comply, and patients who use an out-of-network doctor that’s mistakenly listed as in-network cannot be charged out-of-network rates.
Though doctors and insurers blame each other for inaccurate directories, both groups are heavily lobbying against the bill, calling it unnecessary. CalMatters found that collectively, they have given at least $4.7 million to California legislators since 2015.
Students work on puzzles in the transitional kindergarten program at Westwood Elementary School in Stockton on Sept. 22, 2023. Photo by Loren Elliott for CalMatters
Though state officials praise the fact that there are more kids in transitional kindergarten than there were two years ago, the program is reaching a smaller percentage of eligible students, complicating the picture of success California has painted .
As CalMatters K-12 education reporter Carolyn Jones and data reporter Erica Yee explain, last year, 151,000 4-year-olds were enrolled in TK, compared to 75,000 in 2022. The doubled growth has drawn praise from Gov. Newsom and the State Superintendent of Public Instruction Tony Thurmond .
But using two different methods, CalMatters found that as eligibility for TK expands, the percentage of kids who are able to attend TK actually fell: Between the school years of 2021-22 and 2023-24, the percentage of students who are enrolled dropped between 4 to 7 percentage points.
There are a few reasons that could explain the stagnant percentage of TK enrollment. One is that wealthy districts, which opt out of state funding because they have their own funding streams through local property taxes, are slow to open TK programs.
California also offers free preschool to low-income families, and some parents prefer keeping their children in preschool rather than enroll in a TK program. Though both programs offer kids a place to play and socialize, unlike preschool teachers, the state requires TK teachers to hold one of several teaching credentials . By 2025-26 they must also earn extra units in early childhood education — a mandate that has partly contributed to TK programs’ struggles to hire qualified teachers.
Two landline phones at a home in Topanga on Feb. 16, 2024. Photo by Yannick Peterhans, USA Today Network via AP Photo
The California Public Utilities Commission has rejected AT&T’s request to stop providing landlines in areas with no alternatives. CalMatters tech reporter Khari Johnson and producer Robert Meeks have a video segment on Khari’s story on the reliance of landlines for many Californians as part of our partnership with PBS SoCal. Watch it here .
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