CA insurance premiums likely to rise

From CalMatters economy reporter Levi Sumagaysay:

California homeowners and renters should prepare for their insurance premiums to rise: The Insurance Department on Thursday approved the first catastrophe model that insurers can factor into the rates they charge policy holders. 

Citing increased fire risks and rising costs, insurers have pulled back from providing homeowners and fire insurance in the state in recent years. The insurance commissioner’s plan to try to fix the problem and restore insurance availability includes allowing insurance companies to use catastrophe modeling. 

Catastrophe modeling combines historical data with projected risk and losses. Insurers had been pushing to use it in California just like they have in all other states. As a condition of being allowed to use the modeling in setting their rates, insurance companies will be required to write more policies in the state’s high-risk areas. 

The insurance department has been reviewing models since February and is continuing to review two other models. The department said the models should help avoid “year-to-year (premium) fluctuations following major disasters” while taking into account wildfire mitigation at the individual, community, state and federal levels.

A spokesperson for the American Property Casualty Insurance Association said insurers are now reviewing the newly approved model. Companies that choose to use the model will incorporate it into the rate requests they submit to the insurance department.

Another part of Insurance Commissioner Ricardo Lara’s plan will allow insurers to also account for their reinsurance costs in setting rates. Combined with catastrophe modeling, this additional factor is expected to raise property insurance premiums for Californians in the short term — with the hopes of stabilizing the market. 

But consumer advocates critical of Lara’s plan have pointed out that other states that have long allowed insurers to consider both factors in their rate-setting have also seen rising premiums and availability issues.

President Donald Trump signed a GOP-backed bill Thursday to revoke $1.1 billion from the Corporation for Public Broadcasting. The cut will affect radio and television stations of all sizes across California, and some will likely lay off staff or limit their coverage as a result, report CalMatters’ Maya C. Miller and Cayla Mihalovich.

The money provides grants to National Public Radio, the Public Broadcasting Service, their affiliates and other independent public media creators. Republicans have argued that these outlets should be funded by private donors, not taxpayers. All nine GOP members of California’s congressional delegation voted for the cuts.

The defunding threatens smaller stations the most, since their budgets rely heavily on federal dollars. The PBS affiliate KEET-TV in Eureka stands to lose nearly half of its operating budget, while NPR member station KZYX in Mendocino laid off its news director after losing a quarter of its budget.

Besides potentially missing out on lifesaving emergency alerts, listeners could also lose local programming, which are shows that are produced in-house by the local station.

• Connie Leyva, executive director of KVCR: “If we’re not here, the Inland Empire is just hearing about what’s happening in Los Angeles. We want to know what’s happening in our backyard, what’s happening at the schools around us.”

Read more here.

State water regulators are throwing their support behind a controversial proposal to manage water from the Sacramento-San Joaquin Delta and the rivers that feed it, writes CalMatters’ Rachel Becker.

On Thursday the State Water Resources Control Board advanced a $2.9 billion plan that would direct water users to help restore fish habitat and relinquish some water in lieu of complying with stricter usage requirements. After a period of public comment and hearings, the board will hold a vote on whether to adopt the plan.

The board’s endorsement marks a critical juncture in the decades-long battles over California’s water regulations. If adopted, those who don’t submit to these “voluntary agreements” would face minimum flow requirements. Supporters of this plan include Gov. Gavin Newsom, major water suppliers and the state and federal agencies responsible for delivering Delta water southward.

But critics of the plan, such as conservationists, the fishing industry, Delta communities and Native tribes, argue that cities and farms should face harsher restrictions for depleting water from the fragile watershed, which vulnerable fish and other wildlife rely on. 

Read more here.

A federal appeals court dealt a blow to gun control advocates and California’s own policy framework after it struck down the state’s first-in-the-nation law requiring background checks for buying ammunition. Find out why from CalMatters’ Nigel Duara.