To stop more insurance companies from ditching California, the state’s insurance commissioner has approved plans for firms to use “climate change” as an excuse to gin up rates.
California will let insurance companies consider climate change when setting their prices, the state’s chief regulator announced Thursday, a move aimed at preventing insurers from fleeing the state over fears of massive losses from wildfires and other natural disasters.
Unlike other states, California does not let insurance companies consider current or future risks when deciding how much to charge for an insurance policy. Instead, they can only consider what’s happened on a property in the past to set the price.
…On Thursday, California Insurance Commissioner Ricardo Lara said the state will write new rules to let insurers look to the future when setting their rates. But companies will only get to do this if they agree to write more policies for homeowners who live in areas with the most risk — including communities threatened by wildfires.
As climate panic is based on flawed modelling, it seems appropriate that the mathematical voodoo of new rates will be based on catastrophe modelling.
Now, Lara said, he plans to go ahead and allow insurers to use catastrophe modeling that takes into account the projected impacts of climate change and other shifting factors when asking to raise rates. He also said that insurers will be allowed to include reinsurance costs for California coverage into rate filings, though the announcement did not go into specifics. Companies will be allowed to use these models only if they comply with their commitment to increase coverage in the state and reduce the FAIR plan population.
Lara also said that the insurance department finalized a change to the FAIR plan, first announced months ago, which increases the dollar amount that the plan is allowed to cover for commercial properties.
Before, it was capped at $7.2 million to $8.4 million for different types of commercial properties, which include condo associations, homeowners associations, affordable housing developments, and businesses such as wineries that are often located in areas with high fire risk. Now, that cap has been raised to $20 million for all types of commercial properties.