By Stephen Witt, Los Angeles County Politics
State Sen. Ben Allen (D-Santa Monica, Pacific Palisades, Malibu, Beverly Hills, Manhattan Beach, Redondo Beach), running for California insurance commissioner, is blasting his opponent’s plan to have the state take over disaster insurance, calling it an untested experiment that would drive insurers away and leave taxpayers holding the bill.
In an interview with Los Angeles County Politics (LACP) last week, Allen said former San Francisco Supervisor Jane Kim has said in debates that she would be fine with insurers leaving California and the state taking over their coverage, a move he warned would cost taxpayers enormously.
“It’s also absolutely unprecedented. There’s nowhere in the world, so it makes us all guinea pigs for a totally unprecedented, unbacked, unmoored plan,” said Allen. “People right now are fighting for their checks today. Building this system from scratch could take a decade or longer.”
Kim’s signature proposal is a state-run, nonprofit “Natural Disaster Insurance for All” program, funded through existing premiums, that would guarantee coverage for wildfires and floods. Allen calls it a “fair plan on steroids” that would raise costs and put taxpayers on the hook, and points to a provision he says would charge every household about $2,000 after a major disaster.
Kim compares her plan to the National Flood Insurance Program, which Congress created after private insurers stopped covering flood risk, and argues wildfire is heading the same way. The San Francisco Chronicle’s editorial board, in endorsing Allen, warned that her plan would be a disaster for the state.
The two Democrats face off Nov. 3, the first time two members of the same party have competed for the office.
The race has become a litmus test of the party’s moderate wing against its progressive wing. The California Democratic Party, U.S. Sens. Adam Schiff and Alex Padilla, and the Consumer Federation of California have endorsed Allen.
Kim, who served as California political director for Sen. Bernie Sanders’ 2020 presidential campaign and later led the state’s Working Families Party, is endorsed by Sanders, the Working Families Party, and the California Teachers Association. Kim led the June primary with 27.4% of the vote to Allen’s 19.4%, according to Ballotpedia.
“It’s a massively important election. I think the system is really straining at the seams. It’s becoming increasingly difficult for people to get access to good, high-quality, affordable insurance, and we really need somebody in this office who’s ready on day one to address all of these many problems,” said Allen.
The race comes as nearly 1 million Californians have been pushed out of the standard home insurance market and onto the state’s high-cost FAIR Plan or into less-regulated insurers, according to Consumer Watchdog. State Farm, the state’s largest home insurer, stopped writing new homeowners policies in 2023, and Allstate did the same in 2022, citing wildfire losses, rising rebuilding and reinsurance costs, and rules that kept rates from reflecting future catastrophe risk.
Under reforms by term-limited Commissioner Ricardo Lara, the Department of Insurance said both companies filed plans in September to resume writing new policies. Consumer Watchdog counters that the reforms have mostly delivered rate hikes, with insurers seeking more than $570 million in increases while promising about 12,000 new policies.
As commissioner, Allen said, he would focus on a healthier, more competitive market, holding insurers accountable and reducing risk. He would speed up rate reviews and approvals of new insurance products, beef up fraud enforcement, create an office to recruit new insurers to California and add staff to help consumers with claims, saying only about 34 people handle those calls statewide.
He also argued that new homes in high-fire zones should be built only to the strictest fire safety standards.
“Anybody who’s building new construction in the very high fire zone that’s not being built to the very highest fire safety standards is basically freeloading off the rest of us by putting properties up on the market that end up directly on the FAIR Plan, which we’re having to all subsidize and bail out,” said Allen.
“Availability of affordable insurance is what undergirds a modern, functional, mature economy. This comes down to people’s ability to afford a house, start a business, and engage in the economy. And if we’re not careful, we could drive up costs and drive down availability in ways that could really seriously harm quality of life and cost of living here in the state,” he added.
LACP has reached out to Kim’s campaign for a similar interview before Election Day.
