Five property insurers return to California amid new reforms

(FOX40.COM) — Five property insurance companies that left the state are back, according to the California Department of Finance.

Many insurance companies decided to cancel their policies and leave the state because they were worried about fire risks and financial losses.

The five insurance companies CSAA Insurance Group, Mercury Insurance, California Casualty, Pacific Specialty and USAA are making their return, thanks to several new reforms introduced by insurance commissioner Ricardo Lara.

Gov. Gavin Newsom spoke about the insurance crisis earlier on Wednesday and said the following statement.

“I think this issue, I really believe this, from a global perspective, may be one of the most pressing global issues as it relates to the issues of climate change: the inability to purchase a home, let alone to get a mortgage on a home, to develop a home with an insurance market that simply is no longer viable. This issue requires leadership at the national level. It is under-resourced, under-focused. It’s not, I think, top of mind. And we need to be more focused on.”

On top of other reforms, insurance companies would be allowed to factor in climate change and environmental risks when setting prices. Critics of the reforms said they could continue to lead to high premiums.

The five insurers coming back to California have already requested the state to approve a 6.9% rate increase.

Officials stated that insurers said the increase will allow them to stay and invest in California’s insurance market.