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July 10, 2024

ICYMI: Amid the Home Insurance Crisis, Here’s How Rep. Schiff’s Bill Would Stabilize the Market, Prevent Gouging

Washington, D.C.— Bloomberg News recently spoke with Representative Adam Schiff (D-Calif.) about his bill, the Incorporating National Support for Unprecedented Risks and Emergencies (INSURE) Act, which would stabilize the home insurance market while ensuring vulnerable communities are not excluded from coverage.

See key excerpts below:


On Rising Costs and Reduced Availability of Policies

[...] To do so, Schiff is casting a spotlight on an obscure corner of the business: reinsurance, an area in which insurers seek to transfer part of their risk to other companies. He says a proposal he first introduced in January — a measure that’s opposed by industry heavyweights — would provide a cheaper alternative.

As California contends with more frequent and severe natural disasters, including this week’s deadly heat and wildfires, Schiff’s attention to insurance underscores the mounting frustration in the state over the rising cost and reduced availability of homeowners’ policies. The trouble goes well beyond California, with property insurers also pulling back on coverage, and in some cases leaving the market, in states such as Florida and Louisiana.


On Securing Affordable, Accessible Coverage

[...] “There are huge numbers of Californians and people around the country who should be able to buy insurance and yet, because of the way the system has not worked, they’re just unable to buy coverage that’s the least bit affordable,” Schiff said in an interview. “This is something we have to address.”

In January, Schiff introduced the Incorporating National Support for Unprecedented Risks and Emergencies Act, proposing a new federal reinsurance option that he said would be cheaper than private alternatives.

The bill would require participating insurers to offer comprehensive coverage for wildfires, storms and floods, among other risks. Schiff said he would model the proposal after the Terrorism Risk Insurance Act, which was implemented to help insurers recoup losses after the 9/11 attacks.


On Potential Bipartisan Support

[...] Schiff signaled the potential for bipartisan support as property insurance keeps getting more expensive.

“There’s nothing partisan about trying to make sure that your constituents can afford insurance,” he said. “A lot of the red states are at the most risk of climate disasters. California is maybe a blue outlier in that scenario. But a lot of deep red states are facing their own insurance catastrophes.”

Read the full article here.