California homeowners dropped by insurers tell Assembly their plight

Two Californians who lost insurance coverage because of wildfire risk shared their stories with the California Assembly Insurance Committee in its hearing on rate reform on September 17, as well as a press conference preceding the hearing, outside the venue, Los Angeles City Hall.

Bruce Breslau, a resident in a 290-unit homeowners association (HOA) in Chatsworth, California, lost coverage when Farmers dropped the entire HOA earlier this year, he said. 

"Our broker was forced to find coverage from what's called the non-admitted market. These are insurers that are not regulated, so if they go bankrupt and we have a claim, we're also out in the cold," Breslau said in the press conference. "The other side of that coin is we have 50% of the  coverage we had last year. Last year, we had 100% full coverage."

Along with less coverage, the premium for the HOA increased from $349,000 to $1.7 million, according to Breslau, which amounts to a special assessment of at least $5,000 for every member of the HOA.

"Coming up with $5,000 in a middle-class association is very difficult, and that's just for this year alone. We've got a variety of people, a diverse community, old, young, all other persuasions, and we've got many people who are on fixed incomes. They're seniors. We've got people who are unemployed still suffering from the strikes [of summer 2023]."

Speaking in the Assembly hearing later in the day, Breslau said, "I heard the commissioner say things today. I see no immediate relief." He elaborated that several residents of his HOA had written letters about the coverage problem to Lara, their state assembly member and senator, and Consumer Watchdog. The assembly member answered, and Lara answered with a form letter not addressing their situation, according to Breslau. Consumer Watchdog responded immediately, he said.

"I was really surprised to hear some of the swipes he [Lara] took at this organization [Consumer Watchdog]," Breslau told the Assembly committee.

Gigi Bannister, a resident of Crestline in the San Bernardino Mountains, was dropped by Farmers in 2019 and entered California's FAIR plan for wildfire coverage. She also bought a "wrap-around" policy to cover other types of property losses, but it denied her $40,000 claim after an ice storm destroyed an outdoor deck in 2023.

"I do the best I can to keep the brush clear and to mitigate against fire. We should be able to get reasonable rates, reasonably priced, regular home insurance if we keep our places safe," she said.  "Commissioner Lara isn't doing his job. He's letting insurance companies get away with high risk premiums, and he's letting them raise rates, but not expand the coverage."