Kim and Allen Clash Over State Wildfire Insurance Plan
On October 30, the two Democrats competing to become California’s insurance commissioner were sparring over whether Jane Kim’s proposal for state-run wildfire coverage would saddle homeowners with substantial costs. Kim says the figures used by Ben Allen’s campaign misrepresent her plan; Allen’s spokesperson stood by the campaign’s claims about potential charges to policyholders.
Kim’s policy brief describes a two-part premium collected through private insurers and directed to the state. One part would reflect a home’s wildfire risk, while a capped contribution from homes statewide would help cover severe fire seasons. The brief points to a proposal in a California Earthquake Authority report that estimated the program might need about $25 billion for an exceptionally bad wildfire year.
The model would buy reinsurance, estimated to cost $2 billion to $3 billion annually, or about $150 to $230 per policy. Without reinsurance, the estimate for a once-in-a-century fire was $1,900 to $2,000 per policy, spread over several years. Allen’s campaign has presented those amounts as costs that Kim’s plan would impose broadly. Kim says the larger assessment applies to a scenario without reinsurance, not her described approach.
The dispute reflects the candidates’ different proposals for a market strained by wildfires, as insurers have restricted or stopped issuing policies and more homeowners have turned to the state’s FAIR Plan. Kim would remove wildfire coverage from private home policies and create a mandatory public program. Allen favors retaining commercial insurers while changing market rules, including faster rate reviews and wildfire modeling in rate filings. Both candidates have criticized the other’s approach, and their race has also involved arguments over campaign donations from the insurance industry.
Kim’s Public Wildfire Plan Puts Bold Reform on the Ballot
On October 30, Jane Kim was pushing back against Ben Allen’s portrayal of her state-run wildfire insurance proposal, arguing that his campaign is turning a worst-case estimate into a misleading price tag. The clash underscores the choice facing California voters: a public program that shifts wildfire risk out of private homeowners policies, or reforms that leave commercial insurers at the center of the market.
Kim’s plan would have private insurers collect a two-part premium and direct it to the state. A home’s wildfire risk would determine one part, while a capped contribution from homes statewide would help pay for severe fire seasons. The policy brief cites a model estimating that $2 billion to $3 billion a year for reinsurance could cost roughly $150 to $230 per policy. A $1,900-to-$2,000 assessment per policy over several years was the estimate for a once-in-a-century fire without reinsurance.
Allen’s campaign has cited those figures as costs for homeowners under Kim’s plan. Kim says the larger charge applies only if the program does not buy reinsurance, and Allen’s spokesperson continued to defend the campaign’s characterization. The argument matters as homeowners face restricted coverage from major carriers and growing reliance on the state FAIR Plan.
Allen proposes keeping private insurers while changing the rules, including shortening rate reviews and permitting insurers to account for catastrophe risks and reinsurance expenses when submitting rate requests. Kim calls that a defense of a failing status quo. The contest also reflects a wider divide between the party’s progressive and mainstream wings, with each candidate challenging the other’s approach and record.
Kim’s Public Insurance Pitch Leaves Homeowners Facing Cost Questions
On October 30, the dispute over California’s insurance crisis centered on a basic question for homeowners: what would Jane Kim’s state-run wildfire insurer cost? Kim says Ben Allen’s campaign has taken estimates out of context, but the figures in her own policy brief include billions in annual reinsurance costs and potentially much larger assessments if the program goes without that protection.
Kim’s proposal would remove wildfire coverage from private homeowners policies and establish a mandatory state program. Her brief describes premiums collected through private insurers, combining charges based on each home’s wildfire risk with a capped contribution from homes statewide. A cited model estimated the program would need about $25 billion in an exceptionally bad wildfire year. Reinsurance would cost an estimated $2 billion to $3 billion annually, or $150 to $230 per policy; without it, the estimate for a once-in-a-century fire was $1,900 to $2,000 per policy over several years.
Allen’s campaign has used those figures to argue that policyholders could face added costs. Kim says the larger assessment is for a scenario without reinsurance, while Allen’s spokesperson repeated the campaign’s position. The debate highlights the financial risks of creating a state insurer on a scale unlike public insurers of last resort elsewhere in the United States.
Allen wants to retain commercial insurers and change the market’s rules, including speeding up rate reviews and permitting companies to account for wildfire risks and reinsurance expenses in rate applications. His approach aims to stabilize the private market; Kim argues it preserves a system marked by rising premiums, cancellations and disputed claims. Voters are choosing between public assumption of wildfire risk and a regulated private-market strategy.
Reported by CalMatters, The San Francisco Standard.
