Kamala had some strong words.
Vice President Kamala Harris recently stirred controversy when she claimed that insurance companies were canceling policies for families affected by California’s devastating wildfires. Her statements, made during a press conference, suggested that insurers were abandoning their customers at the worst possible time, further burdening already devastated families. However, the insurance industry has strongly rejected these claims, calling them “false, wrong, and dangerous.”
David Sampson, president of the American Property Casualty Insurance Association (APCIA), responded to Harris’ remarks, saying, “It is false and irresponsible to suggest that insurers are leaving their customers stranded.” He emphasized that California law prohibits insurance companies from canceling policies mid-term except under rare circumstances, such as non-payment or fraud. “The implication that insurance companies are dropping policyholders just to create fear is not only misleading but irresponsible,” Sampson added.
While it’s true that no policies can be canceled during the term of a contract, the real issue lies in California’s ongoing insurance crisis. Over recent years, many insurers have significantly reduced their exposure in the state. Due to a combination of escalating risks, high repair costs, and increasingly stringent regulations, major companies like State Farm, Allstate, Farmers, and USAA have been scaling back. For example, State Farm announced last year that it would stop renewing 72,000 home and apartment policies due to rising costs and an increased risk of catastrophes.
As a result, many homeowners have found it nearly impossible to obtain or afford insurance coverage, especially in areas prone to wildfires. This has left some properties without insurance at all, complicating recovery efforts for families whose homes were destroyed in the latest fires.
For years, industry leaders have warned that the state’s regulatory environment was pushing insurers to the brink. Sampson pointed out that over the last decade, insurance companies in California have paid out more in claims than they’ve collected in premiums. “For every dollar we’ve taken in, we’ve paid out $1.09 in claims,” he said, underscoring the unsustainable nature of the current system.
In short, while some may try to blame insurers for the current crisis, the real problem lies with the state’s unbalanced regulatory environment and the growing financial instability it creates. Until California reforms its approach to insurance, the state will continue to face a tough road ahead in both wildfire recovery and broader insurance availability.