By Becca Habegger, ABC10
ALTADENA, Calif. — Los Angeles wildfire survivors are calling on Gov. Gavin Newsom to pressure California’s Insurance Commissioner to resign.
They made the announcement at a news conference Thursday morning in Altadena.
Survivors said insurance is collapsing in two ways: tens of thousands of families statewide aren’t able to find, renew or afford coverage for their home and those who do have coverage can find it’s hard to access when they need it.
“We are suffering, we are struggling, and we just want the chance to rebuild our lives and go home,” said L.A. wildfire survivor Jill Spivak.
At Thursday’s news conference – hosted by the Eaton Fire Survivors Network and Consumer Watchdog – some survivors said they blame California Insurance Commissioner Ricardo Larafor delays in being made whole by their insurance company and, for others, having their insurer drop them just months before the fire.
“Families who did everything right, still lost everything,” said Joy Chen, smoke damage survivor and executive director of the Eaton Fire Survivors Network.
Those at the news conference said they believe Lara puts the interest of insurance companies above everyday policyholders.
Survivors point to a new investigation from the New York Times, which says insurance companies exploited loopholes in the Commissioner’s regulatory reform, called the Sustainable Insurance Strategy.
As part of it, as ABC10 has reported on extensively, the commissioner gave insurance companies changes they’ve been wanting for years — but only if companies agreed to write more policies in wildfire-stressed areas.
“He announced the plan in 2023. He said, ‘When this is over, I’m going to give insurance companies rate hikes using these new tools, but I’ll make them increase their policies.’ But the start date was whenever in 2025 or 2026 they get those rate increase requests approved,” said Consumer Watchdog executive director Carmen Balber, whose group is a longtime opponent of Lara. “That means, for the last two years, they’ve been busy dumping policyholders left and right, so they have a lower baseline to start from.”
The Times investigation says many of the areas the Department of Insurance defines as wildfire-stressed are not places Cal Fire or FEMA considers high-risk.
The article highlights Placer County, the entirety of which the Department of Insurance classifies as distressed. That means anywhere insurers write there counts toward their required minimum in order to access the wanted reforms.
However, the New York Times points out, “over 70% of homes (in Placer County) are outside of the state’s high fire hazard zones… a savvy insurer could meet it by zeroing in on Roseville, a city of about 160,000 residents whose boundaries barely graze (Cal Fire’s) high-risk zones….”
The Times found similar situations in the department’s map throughout the state.
A department official told the Times “that insurers will probably gravitate toward those lower-risk homes. But he predicted that those opportunities ‘will be sucked up very quickly, which will force (companies) into the more-fire-risk areas.’”
“Because of what Commissioner Lara has done, FAIR Plan enrollment has doubled and families like these are not getting the benefits that they paid for — for decades, if not generations,” Balber said Thursday.
In a statement to ABC10, the Department of Insurance said it worked with the New York Times over the course of months, providing facts and data.
A spokesperson points out the regulations of the Sustainable Insurance Strategy underwent public scrutiny and hearings before going into effect.
On X, the Commissioner defended his reform to entice insurers to write in distressed areas, saying — in part — “For 30 years under past Commissioners, no coverage guarantee of any kind existed. This is an undeniable first and we are focused on stopping the growth of the FAIR Plan and making these regulations work for those who need coverage the most.”
As for L.A. wildfire survivors, the most recent data update – July 31 – shows more than $20 billion in claims have been paid, with more than 92% of claims at least partially paid. And a Department spokesperson said Lara used “every tool available to ensure wildfire survivors receive all the benefits they are entitled to under current law.”
“He issued a formal Bulletin requiring insurers to fully investigate and pay legitimate smoke damage claims, took legal action against the California FAIR Plan after it failed to follow the same standards, and is currently investigating State Farm over its handling of claims,” the department statement said.
But survivors at Thursday’s news conference said the last 10 months have been awful.
“We’re tired of fighting, being denied benefits,” said Eaton Fire survivor Zaire Calvin. “Being denied what you paid for is — is insane!”
“We have heard directly from thousands of survivors and met with survivor groups about the issues they are facing. We understand their frustration and anger with insurance companies,” the Department statement said. “Nobody should be forced to return to a home that is not safe or remediated. Commissioner Lara recognizes the magnitude of the smoke damage claims issue, and the impact it is having on survivors, and that is the exact reason he convened the Smoke Claims Task Force.”
Since survivors are calling on Gov. Newsom to pressure Commissioner Lara to resign, ABC10 reached out Thursday afternoon to the Governor’s Office to ask if Lara still has his backing. As of Friday afternoon, ABC10 has not yet heard back from the Governor’s Office.