LOS ANGELES – Survivors of both the Eaton and Palisades fires joined forces Thursday, calling for the resignation of State Insurance Commissioner, Ricardo Lara.
Residents are demanding Gov. Gavin Newsom step in. They say if Lara refuses to resign, they want the legislature to start proceedings to impeach him.
Their request comes on the heels of a new report that found a 2023 plan struck between the commissioner and insurers resulted in more policyholders being dropped ahead of January’s emergency.
On Thursday morning, a group of fire survivors led by the Eaton Fire Survivors Network gathered outside Good Neighbor Bar in Altadena to discuss the report. The network consists of more than 8,500 people who were impacted by January’s wildfires.
Fire survivors demand answers
What they’re saying:
“Yes, he needs to step down, why because he doesn’t care about us,” said fire victim Zayre Calvin.
“You are a victim of the fire, then you are a victim of the incompetence of the fire department, and now you are a victim of the insurance commissioner,” stated Greg McPhee.
Lara and Governor Newsom touted the 2023 agreement as a way to stop insurance companies from canceling state homeowners, whose last insurance resort is California’s fair plan.
“The truth is in the details, fair plan enrollment has doubled since the governor and Lara announced they were going to give the insurance companies everything they want,” said Carmen Balber with Consumer Watchdog.
“Yesterday the New York Times published a front page expose revealing that in 2023, Commissioner Lara secretly struck a deal with insurance companies incentivizing them to dump tens of thousands of California families ahead of the Los Angeles fires while securing rate hikes for themselves,” Joy Chen with Eaton Fire Survivors Network said during the press conference.
“Our insurance premium doubled and our coverage dropped by a third, so here we are, no home,” said Branislav Kecman. He is one of many who lost everything in the fire, saying he had been dropped by the insurance company before the fire.
Even those who had insurance with major carriers say they are being denied claims over and over again.
Insurance fallout
Dig deeper:
In 2023, various insurance companies announced plans to depart from California’s market. Lara reached a deal with insurers, which incentivized insurers to remain in the state in exchange for future rate hikes. The agreement sought to ensure insurers would write policies in fire-prone areas at a rate equal to at least 85% of their market share across the state.
The report examined data after those rules were enacted, finding that enrollment in the state’s FAIR Plan doubled as insurers dropped far more policyholders in fire-prone areas than promised.
Companies dropped policyholders in “distressed” zipcodes while writing policies for homeowners located in lower-risk neighborhoods inside larger high-risk fire-prone areas, and still qualified for rate increases, according to the report.
Homeowners who signed up for the state’s FAIR Plan often paid more for less coverage. The state’s plan is a fire insurance program created in 1968, giving homeowners coverage who cannot find private market insurance.
Lara’s office issued a statement Saturday, calling the report a “welcomed story,” highlighting how insurance companies and outside groups are attempting to manipulate new regulations. His office noted that more action may be needed to reduce the FAIR Plan’s growth.
The office also noted Lara and the California Department of Insurance collaborated with The New York Times for months for the report, and provided extensive background information, interviews and access to data and research. Lara said this was not a surprise to anyone.
Five insurers have committed to stay and expand in California, with rate increases averaging 6.9%. The department is expected to review these rate filings in a public, transparent process so Californians do not pay more than is required, state officials said.
Statement from commissioner’s office
Michael Soller, Deputy Insurance Commissioner, sent FOX 11 the following statement.
“For months the Department of Insurance worked with the New York Times to provide facts and data that formed the basis of their reporting. Their conclusions are their own, but we invite public scrutiny to make things better for consumers. Commissioner Lara has responded directly to the New York Times coverage.
We built the Sustainable Insurance Strategy knowing that insurance companies and intervenors would prod and probe for loopholes they think they can exploit. This is not a surprise to anyone that has dealt with them. If it is, welcome to Earth. All eyes are on insurance companies including mine and the NY Times. I won’t accept another 30 years of stagnant regulations. I’m here to finish the job — and leave the next Commissioner in a stronger position than I inherited. For 30 years under past Commissioners, no coverage guarantee of any kind existed. This is an undeniable first and we are focused on stopping the growth of the FAIR Plan and making these regulations work for those who need coverage the most.
The regulations that make up the Sustainable Insurance Strategy were open to public scrutiny for more than a year in an open and transparent process as required by law. To learn more visit insurance.ca.gov.
The facts are Commissioner Lara has moved quickly and decisively to respond to the fires including using every tool available to ensure wildfire survivors receive all the benefits they are entitled to under current law. He issued a formal Bulletin requiring insurers to fully investigate and pay legitimate smoke damage claims, took legal action against the California FAIR Plan after it failed to follow the same standards, and is currently investigating State Farm over its handling of claims.
He has been clear since the start of the LA Fires that the health and safety of the people impacted by the fires is the top priority. And the Department has been assisting survivors since day 1 and taking action so claims are paid fully, fairly, and quickly. The Department has recovered more than $135 million for wildfire survivors through our intervention on complaints filed with us. To date, insurance companies have paid more than $20 billion on more than 41,800 claims, with 92% of claims fully paid or underway. Source: LA County Wildfire Claims Tracker.
We have heard directly from thousands of survivors and met with survivor groups about the issues they are facing.
We understand their frustration and anger with insurance companies. Nobody should be forced to return to a home that is not safe or remediated. Commissioner Lara recognizes the magnitude of the smoke damage claims issue, and the impact it is having on survivors, and that is the exact reason he convened the Smoke Claims Task Force. For 30 years under multiple insurance commissioners, there have been no efforts to establish standards for the remediation of smoke damage and handling of smoke damage claims. We are using every tool to help current wildfire survivors and put standards in place so future survivors won’t experience the same frustration.”
The Source: Information for this story came from interviews by fire survivors during a press conference Thursday, Nov. 6. A statement was provided by Michael Soller, Deputy Insurance Commissioner, and background information came from City News Service.