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California’s new insurance czar reveals massive overhaul to entire industry in the state: ‘No more’
Jane Kim, California’s insurance commissioner-elect, has proposed a state-run nonprofit fund to provide wildfire insurance to homeowners. The plan would shift wildfire coverage out of standard home policies and offer a public alternative as private insurers pull back and households face rising costs.
Seven of the state’s largest property insurers have limited or paused new home policies. Stanford research cited in the article puts premium rises at 84% since 2020, while the state’s FAIR Plan now covers about 5% of homes, up from less than 2%. Kim won about 53% of the vote, and says the new fund would require cooperation with lawmakers and community leaders on how to establish and run it.
In short
- Jane Kim proposes a public nonprofit fund for wildfire insurance.
- California home premiums have risen 84% since 2020.
- The plan would need lawmakers’ and community leaders’ support.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
A state-run nonprofit wildfire fund could keep cover available as private insurers retreat, limit the growth of the FAIR Plan and give households facing steep premium rises a public alternative. Supporters could argue that pooling wildfire risk statewide makes protection more dependable and reflects a public responsibility to help communities remain insurable.
The case against
Moving wildfire coverage out of ordinary home policies could leave the public fund carrying substantial costs and expose taxpayers or policyholders to losses after severe fire seasons. Critics could argue that a state-run scheme may weaken incentives to reduce risk, distort insurance prices and make it harder to attract private insurers back, while its financing and governance remain unresolved.
Explained simply
Wildfire damage is usually covered by standard home insurance, but the cost and risk of insuring homes in fire-prone areas have risen. Several large insurers have limited or paused new policies in California, leaving some homeowners with fewer choices and higher bills.
Jane Kim, who was elected California’s insurance commissioner, has proposed a public, nonprofit fund to cover wildfire damage separately from ordinary home insurance. The state’s existing FAIR Plan is a backup option for people unable to find cover in the private market; it now covers about 5% of homes.
Setting up a new fund would require agreement with state lawmakers and community leaders. Its design could affect how wildfire risks and costs are shared among homeowners, insurers and the state.