Why Californians Are Losing Their Home Insurance | Rex Frazier

California Insider

“Too many people are going to the FAIR Plan. Nobody should want to be in the FAIR Plan; it’s meant to be a temporary market of last resort. It’s an unvirtuous cycle. Under the law, any deficiency that the FAIR Plan has, and the amount of money it has to pay claims, it just turns around to the admitted insurance companies. That has huge cascading impacts on the entire insurance industry.”

Siyamak sits down with Rex Frazier, president of the Personal Insurance Federation of California and former deputy Insurance Commissioner of California. Some Californians are losing their insurance coverage, and key insurance companies are avoiding writing more insurance in California. Rex is here to tell us what’s happening behind the scenes, why we are here, and if there is a way out.

“California has by far the most complicated rate formula in the US. We have these extreme problems because of the rules that we put in place in the early 1990s. We haven’t updated them. Every other state has updated them. The tough part now is that we’re just waiting on the regulations to change.”

*Views expressed in this video/article are opinions of the author and do not necessarily reflect the views of California Insider.