Sen. Suzette Martinez Valladares, R-Acton, joined insurance experts and local business leaders last week at College of the Canyons for a discussion of the growing insurance crisis in California because of more frequent wildfires. Valladares emphasized the need for home hardening incentives, adjus ting the homeowners tax credit to offset insurance rate increases and more insurance companies coming back to the area to encourage competition, which would lower rates for customers.  The event, which was the Valley Industry Association’s March luncheon, also included two area insurance experts who spoke about issues they’ve been seeing, and they answered questions. They echoed many of Valladares’ sentiments.  Insurance experts speak about the California insurance crisis to a room of business leaders at College of the Canyons in Valencia, Friday, March 21, 2025. Michael Picarella/The Signal “I want to let you know that I’m a homeowner,” Valladares said. “My insurance agent is not here right now, but I’ve told him, ‘Darren, please do not call me in January anymore. I don’t want to hear it.’ Every time he calls me, I’m worried. I’m like, ‘Am I going to be canceled?’ And I haven’t been canceled, but he tells me my rate is going up. And I’m like, ‘Stop. Stop calling me and telling me rate is going to increase.’”  Valladares said the insurance crisis isn’t just a residential issue, but a commercial issue, too, adding that she knows of a local film studio that, once upon a time, had a premium of about $200,000 compared to what it is now, upwards of $1 million.  She acknowledged how California’s regulated insurance market has tightened considerably, leaving consumers with far fewer options.   “In fact, fewer and fewer insurance carriers are willing to underwrite policies in California, and downright some of them have said, ‘We’re not writing new policies,’” she said. “A lot of insurance (companies) are dropping customers, and more and more, we’re seeing people have to move to the FAIR Plan.”   The California Fair Access to Insurance Requirements Plan, which is more or less a temporary solution, is unable to cover total losses, Valladares said, adding that it was created in 1968 as a last resort for those who couldn’t find coverage anywhere else.   Over the years, the FAIR Plan, she said, has seen dramatic increases in the number of policy holders across the state. Every wildfire season increases losses for insurance carriers, causing them to drop customers who then have no choice but to turn to the FAIR Plan for coverage.  “So, what does this mean for you and your business here in Santa Clarita?” Valladares asked. “By law, the insurance companies, who are the financial backstop for the FAIR Plan, can pass half of their assessment onto their consumers.”   The reality, she said, is that business owners, residents — policyholders across the state — will be billed by insurers so they can recoup the massive costs they’re taking on, and that’s just one more costly burden making California unaffordable, adding to the already incredibly high cost of living and cost of doing business in the state.  Additionally, Valladares spoke about how the difficulty in obtaining insurance has derailed home purchases with so many sales falling through due to homes being in fire-prone areas.  She offered some solutions and ways to help alleviate these issues.   “One of the very important pieces of legislation I decided I was going to introduce was to adjust the homeowners tax credit here in California,” she said. “We all get the homeowners tax exemption, and it’s like on the first $7,000. So, you get like 70 bucks off your property taxes.”   That number hasn’t been adjusted for at least four decades, she said, and it needs to catch up to modern times. She suggested increasing that threshold — even to $200,000. Homeowners, business owners and property owners will then have some relief to help offset the higher premiums they’re no doubt going to pay as insurance rates continue to increase.  Another idea Valladares shared was home hardening, which is the process of increasing a structure’s resistance to wildfires. It means updating structures by using non-combustible or fire-resistant materials. It means clearing debris and/or removing flammable vegetation. It means creating defensible space around a structure.  “We need to be able to incentivize business and we need to be able to incentivize all property owners to home harden, so that our risks are minimized,” she said. “It’s still going to exist, but if we can do that, I think it’s an important part of our future here in California when it comes to inviting the insurance market back in.”  Getting the insurance market back, Valladares added, is critical. The only way to get rates down, she said, is by creating a competitive market.  Dawn Abasta, LBW Insurance commercial lines senior vice president, spoke to the room of people about the insurance crisis as she’s seen it.   “Insurance companies think California is on fire,” Abasta said. “If they don’t think it’s on fire, they think it’s in an ember zone, and that’s the current state of the market.”  LBW Insurance commercial lines senior vice president Dawn Abasta speaks about the California insurance crisis to a room of people at College of the Canyons in Valencia, Friday, March 21, 2025. Michael Picarella/The Signal Insurance companies consider even downtown Newhall an ember zone, she said. From an agency standpoint, Abasta added, that’s what makes advocating for her clients so difficult.  She also spoke about the California FAIR Plan and how people can lose their coverage on technicalities.   “Pay attention to the notices if you’re with California FAIR Plan, whether it be personal or commercial, because they will cancel you for a technicality, and it could take weeks or months to get your coverage back,” she said. “So, just be careful. Read your mail — because they send it snail mail — and they don’t always tell your agents.”  Abasta echoed Valladares’ comments about home hardening, and she also brought up the importance of what she called “agreed mapping,” which refers to the detailed maps insurance companies use to assess fire hazards and property characteristics that aid insurance underwriting and claim processing.  “I go to five carriers, I will get five different fire ratings on that building,” she said. “They all don’t agree. They’re all not consistent. So, getting legislation in place that makes everybody use the same map is another key step.”  Another issue Abasta talked about was the need for the California FAIR Plan to increase its cap, which is currently $20 million. Someone with a four-story building, for example, would likely not qualify for the FAIR Plan.  TWFG Insurance branch owner and agent Scott Wilk Jr. weighed in on the insurance situation. He spoke about the need for competition in the insurance industry.  “Some people actually asked me,” Wilk Jr. said, “‘Hey, as an independent broker, if State Farm leaves, is that really good for you, because that’s more business out there?’ First of all, we’ve got plenty of business right now. There’s no shortage of people shopping for home insurance. And second, I think that would actually be really bad for us, because I think that would kill the market even more. I think anyone else who’s still writing at that point would probably want to shut down, because they wouldn’t want to absorb that market share.”  People in the audience had questions, and the speakers did their best to answer them. All seemed to agree that insurance rates would continue to rise, but they also seemed confident that creativity and vigilance could help alleviate the problems.  TWFG Insurance branch owner and agent Scott Wilk Jr. answers questions about insurance at College of the Canyons in Valencia, Friday, March 21, 2025. Michael Picarella/The Signal The post VIA hosts discussion of growing insurance crisis  appeared first on Santa Clarita Valley Signal. ...read more read less