WASHINGTON — Following the deadly wildfires earlier this year in Los Angeles County, Sen. Adam Schiff, D-Calif., is introducing legislation to protect homeowners from being excluded from insurance coverage due to where they live, Spectrum News has learned.
The Incorporating National Support for Unprecedented Risks and Emergencies, or INSURE, Act would create a federal reinsurance program that requires participating insurance companies to insure homeowners against floods, wildfires and other natural disasters.
The program would also cap the liability of insurance companies in cases of catastrophic events, after the secretary of treasury and an advisory committee of experts determine what that cap should be. The goal is to insulate customers from exhorbitant costs and protect insurers from crippling payouts.
“Too many families and small businesses are struggling to keep up with the rising costs of insurance, and steep year-after-year price increases are simply unsustainable. Significant steps must be taken to address this crisis, and the INSURE Act is one of them,” said Schiff in a statement. “This bill would create a federal risk reinsurance pool to bring down costs and make policies more affordable. All across America, in fire zones and flood plains and well beyond, the most valuable property a family may own is becoming uninsurable. This must be addressed with urgency.”
In California, a number of insurance companies including Allstate, State Farm and Nationwide have stopped writing new home insurance policies in order to protect themselves from rising home replacement costs. The insurance crisis within the state has been particularly acute as homeowners try to rebuild from the devastating Eaton and Palisades fires from January. Three-quarters of those individuals report being underinsured and facing a gap of hundreds of thousands of dollars to rebuild.
Other states prone to natural disasters, such as Florida, Texas and Louisiana, have also seen an increase in policies not being renewed.
Sen. Mazie Hirono, D-Hawaii, has signed on as a cosponsor, calling the legislation a “crucial step” to expanding insurance coverage for Americans.
“People deserve to be able to access affordable insurance coverage to ensure their property is protected, and this bill would be an important step in the right direction,” she said.
Schiff introduced the bill for the first time last Congress as a member of the House, but it failed to gain traction with Republicans, who control the chamber. Democratic Reps. Salud Carbajal, Sydney Kamlager-Dove and Doris Matsui, D-Calif., will reintroduce the legislation in the lower chamber.