Dec 14, 2024
California Insurance Crisis Forces Homeowners To Consider Lawsuit
Listen To Story Above
Recent Los Angeles fire victims may need to pursue a class action lawsuit to receive proper compensation, according to Rep. Darrell Issa (R-CA), after many homeowners lost their insurance coverage due to California’s restrictive premium pricing controls.
The current crisis had been anticipated, with warnings issued over the past two years about the impending insurance market collapse under the policies implemented by Governor Gavin Newsom and Insurance Commissioner Ricardo Lara.
California stands alone among U.S. states in mandating that insurance companies determine premium rates based on historical risks rather than future projections. While Lara’s intention to maintain affordable insurance costs in an already expensive state might seem commendable, the resulting artificially low prices have driven insurers from the market.
Bingo!
California liberal policies FORCED Insurnace companies to leave the state.
Now they want the government to bail them out.
It makes ZERO sense for home owners insurance companies to do business in California, today.
ZERO!
— Patrick Bet-David (@patrickbetdavid) January 25, 2025
The consequences of this policy became evident during the Palisades and Eaton fires, where numerous homeowners had lost their private insurance coverage in the preceding months. Many were forced to rely on the California FAIR Plan, the state’s last-resort insurance provider, which offers significantly reduced coverage. Some residents were left completely unprotected, unable to secure any fire insurance coverage.
Speaking on Breitbart News Sunday, Issa proposed allowing cross-state insurance sales as a potential solution to California’s insurance crisis. He highlighted that while State Farm withdrew from California’s troubled market, it maintained a substantial nationwide surplus of $145.2 billion last year.
“The monopoly that this state has, where they can drive the insurance company out, and then require you have insurance from them [the state] as a carrier … has to stop. This state is only interested in regulating, not in making sure that people really have coverage,” Issa said, while also noting escalating utility costs due to fire risks from power lines.
State Farm has stopped selling property insurance polices in California and is not renewing more than 72,000 policies in certain zip codes
Parts of California may soon no longer be able to get mortgages, “If you can't get insurance, can't get a mortgage”
Jerome Powell says… pic.twitter.com/EMGJfBK4Cs
— Wall Street Apes (@WallStreetApes) February 25, 2025
Issa emphasized that insurance shouldn’t remain under state jurisdiction, citing constitutional principles supporting interstate commerce. For those affected by the recent fires, he suggested that a class action lawsuit against insurers like California FAIR might be their only recourse for adequate compensation.
Having visited his childhood area of Altadena after the fire, Issa attributed the disaster to decades of accumulated forest fuel that the state failed to clear. He noted that many families who had expanded their homes over time would face significant challenges in rebuilding.
The conversation also touched on Issa’s legal challenge to California’s election practices, specifically the counting of ballots received up to seven days after Election Day. He expressed confidence that the case would ultimately reach the Supreme Court, stating, “It matters that we have fair and honest elections.”
