Latest news with #RicardoLara
Newsweek
10 hours ago
- Business
- Newsweek
California Moves Against State's Insurer of Last Resort Over Smoke Policies
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. California regulators have announced legal action against the state's fire insurer of last resort, the FAIR Plan, over its systematic denial of smoke damage claims to hundreds of wildfire victims. On Thursday, the California Department of Insurance (CDI) filed an order to show cause against the FAIR Plan, asking the insurer to go to court and justify its "permanent physical damage" requirement, which for years has been behind its denials of policyholders' claims related to smoke damage. It also issued a cease and desist order, with penalties, against the insurer. "I've spoken with wildfire survivors who would rather lose their homes to flames than endure the stress and confusion of navigating smoke damage claims. This is unacceptable," CDI Commissioner Ricardo Lara said in a news release on Thursday. "This issue has persisted after every fire and has become even more urgent in the aftermath of the largest urban fires in history, the Palisades and Eaton fires. These consumers' message is clear: they need assistance, not obstacles," he added. "We will not tolerate insurance companies breaking the law and denying Californians the coverage they deserve, including the FAIR Plan." Critics, however, said that Golden State's authorities should have taken action years ago when they first learned that the FAIR Plan's smoke policies were likely illegal. Newsweek contacted the FAIR Plan for comment on Friday outside standard working hours. Why Is the California FAIR Plan Under Such Scrutiny? The California FAIR Plan is the state's fire insurer of last resort, offering fire coverage to homeowners who cannot find it anywhere else on the private market. The FAIR Plan, unlike other states' insurers of last resort, is not operated by the state. It is under the helm of the insurance industry. In recent years, as several major insurers cut coverage across the state to avoid paying enormous damage claims in some of the most risk-prone areas should disaster strike, the FAIR Plan inflated in size. As of June, according to the insurer's own data, the FAIR Plan had 610,179 policies and a total exposure of $650 billion, up 42 percent from September 2024 and 289 percent from September 2021. While for many homeowners dropped by their private carriers, any fire coverage is better than none, the FAIR Plan is often not an ideal solution. The insurer offers policies with less coverage than standard home insurance, and they are generally more expensive. In this aerial view taken from a helicopter, a stucco villa owned by David Steiner is still standing among burned homes during the Palisades fire in Malibu, Los Angeles County, California, on January 9. In this aerial view taken from a helicopter, a stucco villa owned by David Steiner is still standing among burned homes during the Palisades fire in Malibu, Los Angeles County, California, on January 9. JOSH EDELSON/AFP via Getty Images On top of that, many wildfire survivors have found through the years that the FAIR Plan is particularly reluctant to cover smoke damage claims. In June 2017, the FAIR Plan revised its policy language to require "permanent physical damage" for smoke claims, a rewording that has since allowed the insurer to issue more and more denials. In 2022, an investigative hearing into the FAIR Plan found that the insurer's handling of smoke claims was less than adequate. In May 2024, the California Supreme Court ruled that "damage caused by noxious substances or odors," such as smoke, should be covered where a policy insures against "direct physical loss or damage to" property—a decision that the CDI asked the FAIR Plan to align with. But the Palisades and Eaton fires struck before any change was made. Since then, the CDI has received more than 220 smoke-related consumer complaints against the FAIR Plan. In July, a spokesperson for the FAIR Plan told Newsweek that its coverage of smoke damage was fully consistent with its coverage of burn damage. "Both require direct physical loss. All FAIR Plan burn damage and smoke damage claims are handled consistent with California law. The FAIR Plan eliminated the use of the 'sight and smell' test last year, and has never enforced the smoke dispute resolution provision," the spokesperson said. They added: "Since last year, we have been working collaboratively with the California Department of Insurance to update and clarify our policy language around smoke damage, so the language is consistent with the manner in which these claims are being adjusted. Our goal is to continue providing fair and reasonable coverage for wildfire-related losses while maintaining the financial integrity of the FAIR Plan for all policyholders." Too Late for the FAIR Plan—But Not for State Farm The Eaton Fire Survivors Network, a grassroots community connecting about 6,500 survivors of the January wildfires in Los Angeles County, said Lara already knew there was something deeply wrong with the FAIR Plan's smoke policies in 2022, when his market conduct exam on the insurer was completed. "Yet he took no action until today, three years later," a statement by the network shared with Newsweek said. "That delay caused real harm. Eaton and Palisades fire survivors suffered needlessly under FAIR Plan smoke damage denials because Lara failed to act on the findings of his own investigation." The network is now shifting its attention to State Farm, asking Lara to complete and enforce the market conduct exam on the carrier "before approving another billion-dollar rate hike," the group said. State Farm, California's largest home insurer, is now facing a market exam following numerous complaints by policyholders over delays in paying their damage claims or outright denials. "Numerous homeowners reported delays and denials in claims processing, particularly concerning smoke contamination and hazardous materials like lead and asbestos," Chip Merlin, the founder and president of Merlin Law Group, told Newsweek. "The concerns regarding smoke are that State Farm has often delayed investigating for the finding of toxic residue from the smoke. Then when it does investigate, it limits its sample size so not enough areas of the home are being searched," Marlin explained. "Further, it then does not fully test those samples looking to find all the various types of toxic materials. The allegations and complaints are that the delayed investigation is pretextual." State Farm is also facing allegations of purposefully underinsuring homes, a practice that previous market exams had already unearthed. "I expect that the current examination will lead to many of the same conclusions as the last market conduct study. Many more mandated changes in State Farm's claims handling procedures, restitution to affected policyholders and changes to its underwriting must occur," Merlin said. He continued: "Because State Farm had a chance to correct these issues and failed to do so, I expect that the potential fines are great. To prevent another repeat of this, I would expect the study to require State Farm to report on its progress in addressing these issues, along with deadlines it must meet." The company finds itself under scrutiny for its recent request to hike its rates again, which State Farm says is necessary to stabilize its financial footing on the increasingly risky California market. In December 2023, State Farm received approval for a 20 percent increase in homeowners insurance premiums, which took effect in March 2024. Following the devastating wildfires earlier this year, it requested an emergency interim rate increase of 22 percent, which was reduced and approved as a 17 percent interim emergency rate increase effective June 1. "State Farm is still pursuing approval for the full 30 percent increase, with hearings scheduled for later this year," Merlin said. "I think State Farm will get another significant rate increase. The losses are much greater than what was originally determined. These fires were a historic event not seen since the last great urban fire in San Francisco more than a hundred years ago." He added: "The cost of these fires, as well as others that are happening at a much greater frequency, is causing significant losses and financial pressures. The fire peril losses in California have been off the charts for a decade. State Farm can certainly make a case for the need for higher rates." The question, Merlin said, is how to make sure coverage remains affordable for California homeowners. "Some may find that the cost of home ownership is simply too great, with insurance costs increasing significantly in such a short period," he added. "I don't see a short-term solution to this problem," Merlin said. "Rates and premiums will go up, but people might not be able to afford it. The long-term mitigation solutions will take far greater time to implement before those cost savings are realized. This is truly a crisis."
Business Upturn
24-07-2025
- Business
- Business Upturn
Verisk Sets Precedent as First to Complete Wildfire Catastrophe Model Review Process in California for Insurance Ratemaking
JERSEY CITY, N.J., July 24, 2025 (GLOBE NEWSWIRE) — In a milestone for California's evolving insurance landscape, the California Department of Insurance (CDI) has completed its review of the Verisk Wildfire Model for the United States for use by insurers in assessing wildfire risk and property insurance ratemaking. This is the first time a catastrophe model has successfully completed the evaluation under the state's new regulatory framework, ushering in a new era of data-driven risk assessment in California. Developed by the Extreme Event Solutions business of Verisk (Nasdaq: VRSK), a leading global analytics and data provider, the Verisk Wildfire Model for the United States leverages decades of wildfire science, engineering expertise, and climate data to provide a forward-looking view of risk. It was extensively reviewed through the CDI's Pre-Application Required Information Determination (PRID) process as part of Commissioner Ricardo Lara's Sustainable Insurance Strategy aimed at stabilizing the state's insurance market. This included a review process open to the public, a PRID which included consumer advocates, and an additional public webinar. With the PRID review completed, California insurance carriers can, for the first time in the state's history, use a robust, forward-looking wildfire model to more accurately assess wildfire risk—supporting a more resilient insurance market and encouraging greater insurer participation, which can benefit consumers in wildfire-prone areas. Catastrophe models are accepted as a part of ratemaking in all states; the Verisk Wildfire Model for the United States is already approved by the Nevada Division of Insurance issued in February 2025. 'This is a transformative moment for the insurance industry and for California homeowners and businesses,' said Rob Newbold, president of Verisk Extreme Event Solutions. 'We're proud to be the first catastrophe modeler to work with the California Department of Insurance to offer a modeled assessment of wildfire risk and contribute to efforts to bring stability to the insurance market. The latest version of the model, released in 2024, reflects decades of scientific research and engineering expertise, and we believe it will be a powerful tool for insurers navigating the complexities of wildfire risk in a changing climate.' The determination comes amid growing concern over insurance availability in fire-prone regions. Several major insurers have scaled back coverage in California, citing unsustainable losses and outdated rating tools. By allowing the use of catastrophe models, the CDI aims to give insurers a more accurate and actuarially sound basis for pricing risk—while encouraging them to return to underserved areas. Verisk's model incorporates advanced science and data and accounts for both property-level and community-level mitigation efforts. 'This approval is the result of years of collaboration, transparency, and rigorous review,' said Dr. Julia Borman, assistant vice president and director of regulatory at Verisk Extreme Event Solutions. 'We're grateful to the CDI for their thoughtful engagement throughout the process and to our clients for their support. This milestone underscores Verisk's commitment to helping insurers and regulators make informed, data-driven decisions that benefit both the industry and the communities they serve.' For more information about Verisk's wildfire modeling capabilities, visit: Verisk Wildfire Model for the U.S. ### About Verisk Verisk (Nasdaq: VRSK) is a leading strategic data analytics and technology partner to the global insurance industry. It empowers clients to strengthen operating efficiency, improve underwriting and claims outcomes, combat fraud and make informed decisions about global risks, including climate change, extreme events, sustainability and political issues. Through advanced data analytics, software, scientific research and deep industry knowledge, Verisk helps build global resilience for individuals, communities and businesses. With teams across more than 20 countries, Verisk consistently earns certification by Great Place to Work and fosters an inclusive culture where all team members feel they belong. For more, visit and the Verisk Newsroom. Disclaimer: The above press release comes to you under an arrangement with GlobeNewswire. Business Upturn takes no editorial responsibility for the same. Ahmedabad Plane Crash
Toronto Star
24-07-2025
- Business
- Toronto Star
Verisk Sets Precedent as First to Complete Wildfire Catastrophe Model Review Process in California for Insurance Ratemaking
JERSEY CITY, N.J., July 24, 2025 (GLOBE NEWSWIRE) — In a milestone for California's evolving insurance landscape, the California Department of Insurance (CDI) has completed its review of the Verisk Wildfire Model for the United States for use by insurers in assessing wildfire risk and property insurance ratemaking. This is the first time a catastrophe model has successfully completed the evaluation under the state's new regulatory framework, ushering in a new era of data-driven risk assessment in California. Developed by the Extreme Event Solutions business of Verisk (Nasdaq: VRSK), a leading global analytics and data provider, the Verisk Wildfire Model for the United States leverages decades of wildfire science, engineering expertise, and climate data to provide a forward-looking view of risk. It was extensively reviewed through the CDI's Pre-Application Required Information Determination (PRID) process as part of Commissioner Ricardo Lara's Sustainable Insurance Strategy aimed at stabilizing the state's insurance market. This included a review process open to the public, a PRID which included consumer advocates, and an additional public webinar.
Hamilton Spectator
24-07-2025
- Business
- Hamilton Spectator
Verisk Sets Precedent as First to Complete Wildfire Catastrophe Model Review Process in California for Insurance Ratemaking
JERSEY CITY, N.J., July 24, 2025 (GLOBE NEWSWIRE) — In a milestone for California's evolving insurance landscape, the California Department of Insurance (CDI) has completed its review of the Verisk Wildfire Model for the United States for use by insurers in assessing wildfire risk and property insurance ratemaking. This is the first time a catastrophe model has successfully completed the evaluation under the state's new regulatory framework, ushering in a new era of data-driven risk assessment in California. Developed by the Extreme Event Solutions business of Verisk (Nasdaq: VRSK), a leading global analytics and data provider, the Verisk Wildfire Model for the United States leverages decades of wildfire science, engineering expertise, and climate data to provide a forward-looking view of risk. It was extensively reviewed through the CDI's Pre-Application Required Information Determination (PRID) process as part of Commissioner Ricardo Lara's Sustainable Insurance Strategy aimed at stabilizing the state's insurance market. This included a review process open to the public, a PRID which included consumer advocates, and an additional public webinar. With the PRID review completed, California insurance carriers can, for the first time in the state's history, use a robust, forward-looking wildfire model to more accurately assess wildfire risk—supporting a more resilient insurance market and encouraging greater insurer participation, which can benefit consumers in wildfire-prone areas. Catastrophe models are accepted as a part of ratemaking in all states; the Verisk Wildfire Model for the United States is already approved by the Nevada Division of Insurance issued in February 2025. 'This is a transformative moment for the insurance industry and for California homeowners and businesses,' said Rob Newbold, president of Verisk Extreme Event Solutions. 'We're proud to be the first catastrophe modeler to work with the California Department of Insurance to offer a modeled assessment of wildfire risk and contribute to efforts to bring stability to the insurance market. The latest version of the model, released in 2024, reflects decades of scientific research and engineering expertise, and we believe it will be a powerful tool for insurers navigating the complexities of wildfire risk in a changing climate.' The determination comes amid growing concern over insurance availability in fire-prone regions. Several major insurers have scaled back coverage in California, citing unsustainable losses and outdated rating tools. By allowing the use of catastrophe models, the CDI aims to give insurers a more accurate and actuarially sound basis for pricing risk—while encouraging them to return to underserved areas. Verisk's model incorporates advanced science and data and accounts for both property-level and community-level mitigation efforts. 'This approval is the result of years of collaboration, transparency, and rigorous review,' said Dr. Julia Borman, assistant vice president and director of regulatory at Verisk Extreme Event Solutions. 'We're grateful to the CDI for their thoughtful engagement throughout the process and to our clients for their support. This milestone underscores Verisk's commitment to helping insurers and regulators make informed, data-driven decisions that benefit both the industry and the communities they serve.' For more information about Verisk's wildfire modeling capabilities, visit: Verisk Wildfire Model for the U.S . ### About Verisk Verisk (Nasdaq: VRSK) is a leading strategic data analytics and technology partner to the global insurance industry. It empowers clients to strengthen operating efficiency, improve underwriting and claims outcomes, combat fraud and make informed decisions about global risks, including climate change, extreme events, sustainability and political issues. Through advanced data analytics, software, scientific research and deep industry knowledge, Verisk helps build global resilience for individuals, communities and businesses. With teams across more than 20 countries, Verisk consistently earns certification by Great Place to Work and fosters an inclusive culture where all team members feel they belong. For more, visit and the Verisk Newsroom .
Yahoo
22-07-2025
- Business
- Yahoo
Alarming report warns that huge number of once-valuable homes may soon be 'worthless': 'State of crisis'
Alarming report warns that huge number of once-valuable homes may soon be 'worthless': 'State of crisis' A study has shown that destructive weather patterns are causing massive strain on the California home insurance market, according to InsuranceNewsNet. What's happening? California has been battered by catastrophic wildfires in recent years, leaving properties and lives in shambles. Direct air capture company Deep Sky has released findings showing that one in five homes in the most extreme fire risk areas of California have lost insurance coverage since 2019. Many insurance companies pulled coverage just months before the record-setting Palisades fires in January 2025. "The home insurance market is in a state of crisis. The highest risk areas of California have effectively become uninsurable and will soon become unaffordable," said the report. "Banks will not approve mortgages without home insurance, and few will buy a house without a mortgage (in a high risk wildfire area no less). Without significant policy intervention, these properties will eventually become worthless." Why is home insurance important? "We are in a statewide insurance crisis, affecting millions of Californians," said Insurance Commissioner Ricardo Lara, per InsuranceNewsNet. "Taking this on requires tough decisions. This is not a game." This sentiment has been shared by the U.S. Senate Budget Committee, which has projected that climate shifts will prompt a housing market crash worse than the one in 2008. What's being done about home insurance hikes? Wildfire season has begun in the state, and solutions are hard to find. "California is just entering the worst phase of its crisis," said Diane Delaney, executive director of the Private Risk Management Association, per InsuranceNewsNet. "Regulatory limitations have made it difficult for insurers to adjust pricing or expand capacity in high-risk areas." While California has a state-backed insurer of last resort, the amount of risk they're able to be exposed to is limited. Florida has attempted several reforms, which have included financial support for insurers, but homeowner rates have continued to rise despite the "corporate welfare." Do you feel like your home is well-insulated? Definitely In most areas Only in some rooms Not at all Click your choice to see results and speak your mind. Join our free newsletter for good news and useful tips, and don't miss this cool list of easy ways to help yourself while helping the planet. Solve the daily Crossword
