{
  "id": 12844484,
  "title": "California’s Insurance Crisis Needs a New Foundation | Opinion",
  "url": "https://urgent.news/2026/10/08/californias-insurance-crisis-needs-a-new-foundation-opinion",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-10-08T10:32:05.000Z",
  "source": {
    "name": "Newsweek",
    "slug": "newsweek",
    "url": "https://www.newsweek.com/californias-insurance-crisis-needs-a-new-foundation-opinion-12539576"
  },
  "original_language": "en",
  "account": "California's insurance market is in dire need of a comprehensive overhaul that aligns with the actual risks faced by residents. According to the California Department of Insurance, as of June 2026, 696,562 homeowner and commercial policies were held under the FAIR Plan, the state's last resort insurance provider. Concurrently, there were 8 homeowner rate filings under review. While the department has made strides in catastrophe modeling and rate review improvements, these measures are mere scaffolding for a structure built for a different era. The bedrock of this system, Proposition 103, enacted by voters in 1988, aimed to shield consumers from exorbitant rates and foster competition. Although those objectives remain valid, California now grapples with a dramatically different risk landscape, necessitating a revision of the outdated rules. The recent reforms are welcomed, as they enable insurers to make informed decisions based on enhanced catastrophe data and risk-based pricing. However, the progress is insufficient. The presence of 12 expanding homeowner insurance groups in California, compared to none in 2025, signifies incremental movement in the right direction, but it is not sufficient to stabilize the market. The implications of this crisis extend far beyond the insurance sector. When homeowners cannot secure coverage, obtaining a mortgage becomes arduous. Businesses may hesitate to invest in new buildings, equipment, or employ additional staff without adequate insurance. Slower rebuilding efforts hinder economic recovery and job creation. Insurance should not be viewed as an optional luxury; it is a crucial component of the infrastructure that sustains households and local economies. It is high time to abandon the notion that every insurance issue stems from an insurer's greed. Rhetoric portraying carriers as villains might be advantageous during election cycles, but it does not generate coverage. When regulation hinders accurate risk pricing, insurers have less incentive to participate. Fewer insurers imply reduced supply, fewer options for consumers, and ultimately, higher prices. Litigation funding, attorney advertising, and other legal maneuverings also contribute to escalating claims costs and insurance premiums. Research from the Insurance Information Institute indicates that certain states, including Indiana, Montana, West Virginia, Kansas, and Georgia, have implemented disclosure requirements to address these issues. California should not wait for a crisis to mandate transparency. Having personal experience with the complexities of reform, I drafted the California Insurance Market Reform Act to tackle some of the structural issues within the rate-review system, such as the involvement of interveners that can prolong proceedings. Regrettably, I withdrew the initiative due to intense opposition and the risk of a competing measure that could exacerbate the market's problems. This experience highlighted that California's insurance crisis is not merely a technical matter; it is also a political one. Therefore, the role of independent insurance agencies is paramount. As the principal and owner of one such agency, I witness firsthand how we bridge the gap between a convoluted insurance market and the individuals who must endure its consequences. Our role is not merely to sell policies; we are advisors, translators, and, in markets with limited options, shock absorbers. Policymakers must complete the reform process. Modernizing the rate-review framework, leveraging transparent catastrophe data, reforming litigation funding, and prioritizing consumer education are essential steps. By addressing these aspects effectively, the resulting chain reaction is clear: modern regulations attract more insurance carriers, fostering competition, enhancing choices, and improving value. A well-functioning insurance market bolsters home sales, rebuilding efforts, lending activities, businesses, and employment opportunities. Neglecting the foundation and persisting with mere scaffolding will result in an endless cycle of scaffolding, leaving more individuals without adequate protection. Insurance reform is not a favor to insurers; it is an investment in economic infrastructure. California should treat it as such. Elizabeth Hammack, an agency principal and head of network and strategic relationships at Panorama Insurance Associates, an insurance intermediary, and the proponent of a withdrawn 2026 ballot initiative, emphasizes the gravity of this issue. The expressed views are her own.",
  "summary": "Let's stop pretending that every insurance problem begins with an insurer being greedy, argues Elizabeth Hammack.",
  "key_points": [
    "California's insurance market needs overhaul to match resident risks",
    "FAIR Plan holds 696,562 homeowner/commercial policies as of June 2026",
    "Proposition 103, enacted in 1988, aims to protect consumers from high rates"
  ],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}