Ideas for Change
California’s Homeowners Insurance Market
Problem: The Commission began this study in early 2024, with California’s homeowners insurance market in crisis, impacting homeowners and insurers alike. Many homeowners across the state were contending with rising insurance costs. Meanwhile, insurers were cutting back coverage or limiting new policies in the state, citing rising costs, growing wildfire risks, and lengthy regulatory processes. As a result, many homeowners were losing coverage or struggling to find it. An increasing number turned to the state’s safety-net insurance option for “bare bones” coverage; a smaller, but also growing, number opted to go without coverage altogether.
Recommendation: The state should modify existing rate-setting regulations to include a strong mechanism for public oversight of the catastrophe models used by insurers; clarify how insurers will account for any improvements that homeowners or communities make to reduce fire risks; and, establish requirements for insurers to account for mitigations in their underwriting models. Additionally, the Department of Insurance should modernize its website to provide regular updates on key market indicators and improve information about surplus line options. The Legislature should require the creation of a data commons to enable all stakeholders to access the same property risk information; expand programs to support homeowners to proactively protect their properties against fire; and, define a fire safe minimum set of core, evidence-based mitigations for homeowners and communities, and ensure homeowners are not prohibited from following them.
View Homeowners Insurance Report Fact Sheet (pdf)
Retail Theft
Problem: The Commission began this study in the summer of 2023 amid reports of rising retail theft in the state and complaints from retailers and law enforcement officials that existing statutes were inadequate.Some businesses were citing theft as a reason for closing stores. Mom-and-pop businesses in particular expressed a concern that they had smaller safety net than national retailers to recover from these losses. Losses due to theft were often recuperated through higher prices, a particular challenge for vulnerable populations.
Recommendation: The California Department of Justice should collect detailed data that includes, but is not limited to, the circumstances surrounding a crime, law enforcement’s response, demographic data about the people arrested and, if applicable, charged, the final disposition of the case, and information related to the offender’s rehabilitation, reentry, and recidivism. In order to create evidence-based solutions, a clearer understanding of the complexities involved in the causes and effects of retail crime is necessary. Thus, the State of California should fund universities or other nonpartisan research institutions to study preventative measures, commercial victimization, the economic impact, drivers of public perception, and the fencing of stolen goods.
View Retail Theft Report Fact Sheet (pdf)
CEQA
Problem: The Commission began this study early in 2023, cognizant of many years of controversy over the California Environmental Quality Act (CEQA). CEQA was signed into law in 1970 with the goal of protecting and enhancing the environmental quality of California. Often, CEQA’s protections have been most profound in the most disadvantaged and vulnerable communities, where negative environmental impacts have often been greatest in the past. Defenders of CEQA point to it as the state’s bedrock environmental protection. CEQA critics, on the other hand, have maintained for years that the law can be used for purposes other than environmental protection, and can even delay or derail the completion of projects that would be environmentally beneficial.
Recommendation: The state should strengthen the standing requirement for litigation of alleged CEQA violations and increase judicial training on the subject. The Legislature should revise CEQA to limit the submission of public input that occurs after a public comment period. The state should exempt all infill housing from CEQA review. The Legislature should also commission in-depth studies of several areas of potential CEQA reform, including but not limited to the creation of CEQA courts, translation of CEQA documents, and potential for a bonding requirement for CEQA litigation.