With climate change, it is becoming harder to find comprehensive and affordable home insurance policies across the nation— and especially in California, where the state’s four largest private insurers have significantly reduced their coverage within the last year due to increasing construction and reinsurance costs, and wildfire risk.

Earlier this year, State Farm and Allstate stopped underwriting in the state, while Farmers and USAA have continued to drop policyholders within high-risk fire regions. Nearly all these moves were preceded by insurer warnings that the California regulatory system had become too restrictive; therefore, premiums no longer reflected the home’s actual risk. Underwriters also couldn’t turn a profit— State Farm’s California subsidiary lost more on claims within the first three months of 2023 than in all of 2022, according to The LA Times.

With more residents joining the state-run FAIR Plan, a last-resort policy option, it became clear a legislative move would be necessary to reinstate a diverse and thriving private insurance market. After legislators failed to produce a reform proposal before adjourning this fall, Governor Gavin Newsom tapped State Insurance Commissioner Ricardo Lara to expedite and roll out a plan.

Lara then introduced the Sustainable Insurance Strategy. Though the reforms aren’t slated to go into effect until the end of 2024, the commissioner hopes it will bring private insurers back to at least 85% of their statewide market share within high-risk areas.

In this first episode of a three-part series on insurance, Ten Across founder Duke Reiter and United Policyholders co-founder Amy Bach discuss the details of this latest proposal, including what impact it may have on consumers.