Gavin Newsom said he wants to help California’s home insurance crisis, but details are sparse

Reality Check is a Bee series holding officials and organizations accountable and shining a light on their decisions. Have a tip? Email realitycheck@sacbee.com.

Gov. Gavin Newsom made a splash when he promised on May 10 to bring relief to California’s turbulent insurance market by vowing to speed up how quickly price increases are reviewed in the state.

“Let’s go,” he said during a press conference. “Let’s move this along.”

A spokesperson that day said the governor’s office would have more to share “in the near future.”

Yet no additional details have followed the governor’s flashy pronouncement. And neither he nor his administration have publicly released any proposal in the 10 days since the governor spoke about it.

“We’re working closely with Legislative leadership,” the spokesman said Monday, adding the governor’s office “will have more to share soon.”

Destructive wildfires, increased risks from climate change and higher inflation have created an insurance emergency in the state. Major companies have paused, restricted and cut back business, leaving many homeowners with few options and bills that rapidly rise from year to year.

The absence of information about Newsom’s plan has left lawmakers, companies and policyholders to guess about what could amount to a consequential change related to a vital state issue. And one that will be fast-tracked.

“I hope that the details of the Governor’s plan will be shared soon, and that the Legislature will play a more active role in drafting the language,” Democratic Assemblyman Damon Connolly said. The lawmaker, whose district includes parts of Santa Rosa, said he is glad Newsom is bringing a sense of urgency but added, “It’s going to take all of us working together to solve this problem as we seek to bring meaningful results to Californians as soon as possible.”

The state’s increasing insurance challenges have put pressure on lawmakers to take action and fast. Newsom said he wants his proposal to be attached to California’s upcoming budget as a so-called trailer bill. That would allow it move through the Legislature more quickly than if it was introduced as a traditional bill. It will also go into effect immediately if it passes. It’s a common practice; the governor’s office expects to fasten more than 100 proposals to the budget.

During a hearing Wednesday, lawmakers probed Insurance Commissioner Ricardo Lara for more details.

“We haven’t seen trailer bill language,” said Democratic Assemblyman Jim Wood, whose district also includes parts of Santa Rosa, an area hit hard by the Tubbs Fire and where many people are facing home insurance challenges. “We don’t know what we’re talking about here.”

Lara said he knew what it would say.

The Department of Insurance signs off on rate hikes for home and auto coverage before companies can put them into effect. Those reviews can sometimes take more than a year.

Companies argue the state’s approval process is hurting their finances because delays devalue any price increase that is ultimately approved. Others say deliberative evaluations are important to make sure hikes aren’t excessive.

Lara said the governor’s proposal would create more rigid timelines for how quickly the department will review rate requests. That includes more often following a 60-day review period that is outlined in state law. He said the plan was part of negotiations with legislators and the governor’s office that occurred last year.

His agency has already introduced changes that aim to speed up the rate approval process. But they are under a regulatory review that has already gone on for months. And representatives from key industry trade groups had concerns with an initial version of that plan.

Newsom during his May 10 press conference said he wanted change to occur faster.

“We’ve got to move this,” he said.

A slide during the presentation said the proposal would expedite the insurance rate filing process and that it was a key reform needed to stabilize the insurance market.

But when he answered questions from reporters about it, it was not clear what change the governor was pushing for. At times it sounded like he wanted to speed up the regulatory review. In other moments he appeared to advocate for reviewing rate increases faster.

“We still have not seen the specific language the governor referenced,” said Seren Taylor, a lobbyist for the Personal Insurance Federation of California, which represents major companies. Based on Lara’s comments, though, he said it looked like it would be a positive step.

Harvey Rosenfield, founder of the advocacy organization Consumer Watchdog, feels differently. His organization would oppose the governor’s proposal, he said, if it ends up being what the insurance commissioner described.

Rosenfield said he hopes the delay in releasing more information about the plan is because Newsom is carefully considering how to move forward. The organization often challenges rate increases proposed by companies.

“It’s going to be a very consequential decision for the people of California,” Rosenfield said, “and for him personally.”

Senator Bill Dodd, a Napa Democrat, said the governor’s office recently told his staff that it should have more details of Newsom’s proposal this week.

But Dodd said he didn’t know how that information would be shared.