Consumer Watchdog warns about Commissioner Lara’s deal with insurers | Insurance business America
A low-benefit, high-cost policy is the best homeowners can hope for, it says
Property
By Kenneth Araullo
In a consumer warning video, Consumer Watchdog warns that a low-benefit, high-cost policy similar to the FAIR plan is the best homeowners can expect from Insurance Commissioner Ricardo Lara’s deal with the insurance industry.
“California Insurance Commissioner Ricardo Lara has made a deal with the insurance industry that they say will result in them selling more home insurance in California. “But internal documents obtained by Consumer Watchdog under the Public Records Act show the deal is a consumer bait-and-switch that doesn’t cover a single new homeowner,” Carmen Balber, Consumer Watchdog’s executive director, says in the video.
In September, Commissioner Lara announced a plan that would allow insurance companies to deregulate in exchange for a “commitment” to begin selling again in high-risk areas of California.
However, documents uncovered by Consumer Watchdog show that insurers could meet their obligation by offering the same expensive coverage with limited benefits that homeowners currently access through the FAIR plan.
These documents contain the text of the plan that Lara negotiated in August and which formed the basis of its September agreement with the insurance industry.
Commissioner Lara testified before an oversight hearing of the Assembly Insurance Committee, but did not disclose what type of policy insurance companies would be allowed to offer.
“FAIR Plan policies cover so little”
The consumer warning video highlights the shortcomings of FAIR Plan insurance policies, explaining that such policies cover minimal risks and force homeowners to purchase additional insurance to fill gaps.
“FAIR Plan’s policies cover so little that homeowners have to purchase a second insurance policy to fill in the gaps,” the video says.
It goes on to explain that both standard home insurance and the FAIR plan cover fire, smoke and lightning damage, but additional coverage such as windstorm, hail and vandalism requires an additional payment under the FAIR plan.
Additionally, the FAIR plan does not provide coverage for theft, falling trees, the weight of snow and ice, non-flood water damage, glass breakage, liability, and other common protections.
The video ends with Commissioner Lara giving the insurance industry whatever she wants in exchange for a “false promise” to resume sales in California.
What do you think about this story? Please share your comments below.
similar posts
Stay up to date with the latest news and events
Join our mailing list, it’s free!
Source link
2024-05-17 14:15:28
www.insurancebusinessmag.com
