California plans significant changes to insurance rules as wildfires increase risk

California regulators propose major insurance reforms to address soaring costs and dwindling options for homeowners in wildfire-prone areas.

In short:

California is considering updates to Proposition 103, which currently limits insurance rate changes, to require firms to cover high-risk areas based on market share.
The proposal includes using "catastrophe modeling" to better assess wildfire risks, though its impact on rates is debated.
Experts worry that while these changes may attract insurers back, they could also raise costs for consumers.

Key quote:

"We are nervous. The reality is that prices are so high already, and affordability is so low right now."

— Amy Bach, executive director of United Policyholders

Why this matters:

As wildfires worsen, Californians face fewer and costlier insurance options. These reforms could determine whether homeowners in high-risk areas can find or afford coverage. Read more: Insurance woes increase as climate change impacts profitability.

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