In the Once Golden State, Left Pols and Voters Hollow Out Middle Class, Stick All Homeowners with Wildfire Insurance Bill

We've often contended that voters have to suffer the consequences of their bad decisions when left politicians are elected.

Sometimes the consequences are immediate and at other times the damage is long term.

However, we have never argued that voters in one part of a state should be penalized for the bad political decisions made in another part of  a state.

Yet that's exactly what’s going to happen to California residents in the wake of the Los Angeles wildfires.

Within the past few weeks, we’ve written twice about the LA wildfires.

Once before the fire, here. And once after the fire, here.

We’ve let others focus more on the incompetence that led to the fires, while we’ve explored the insurance repercussions.

KTLA reported a compromise between the insurance commissioner and home insurance companies in California, "A proposal would permit insurers to use computer models to predict future risks when setting premiums while mandating that they provide coverage in high-risk areas proportional to their market share.

"In return, the companies must agree to write policies in high-risk areas that is proportional to the company’s overall market share."

What we missed in that column was an ominous provision for all California homeowners.

Fortune magazine found, "California's insurance commissioner said carriers will be required to increase coverage in risky areas. In exchange, insurers got more leeway on how much they can charge homeowners.  . . .  In return, insurers can incorporate reinsurance costs in their calculations for what they will charge consumers."

Reinsurance is when an insurance company buys insurance to cover itself in the event of huge losses. What this change means is California homeowners will be paying for their insurance and their insurance company’s insurance!

What will that mean to insurance rates?

"Even before the blazes scorched 36,000 acres and counting, advocacy group Consumer Watchdog warned that the state's new regulation could allow insurance companies to hike rates on homeowners by 40% to 50% — and without a significant boost in coverage for wildfire-prone regions."

And that isn’t just LA homeowners, it’s California as a whole homeowners.

And that’s just half of a double whammy.

The other half is the California FAIR insurance program. FAIR is the policy from the state for homeowners that can’t get coverage from private sector insurers.

Rolling Stone explains, "Many homeowners in the state have turned to an insurance program called the Fair Access to Insurance Requirements (FAIR) Plan.

"Created for people who can’t find insurance through the market and run by insurance companies under the commissioner’s oversight, FAIR Plan policies are often more expensive and provide less coverage than traditional plans.

"As private insurers fled California, the program swelled over 60% in the last year. It now has $450 billion in liabilities, though it only has about $385 million in funds to handle them."

A $449 billion shortage for the state and those homeowners?

Well, too bad for them, right?

Wrong.

Rolling Stone again, "The outstanding balance, thanks to Lara’s recent deals with the industry, can now be passed on to homeowners."

This means California homeowners in solid Republican areas will be paying for the incompetence of feckless left politicians in blue, blue, blue LA.

We think this negative spiral of increasing home insurance costs will only increase the flood of political and economic refugees fleeing the state.

When you add a 50% jump in insurance rates to the increased deductibles, the high cost of living and California’s taxes, the numbers no longer add up.

We’d like to think this disaster will be a wake-up call for California voters.

And if left-wingers hadn’t hollowed out the California middle class, it might have been.

But we aren’t optimistic.

We’re thinking voters will simply shuffle the left-adherents while the ship of state heads full speed for the iceberg.

Why?

California’s demographics feature a very wealthy upper class that can afford higher insurance and votes Democratic because it’s the thing to do.

And a much larger, very dependent lower class that doesn’t have insurance and votes Democratic because that’s where the benefits come from. 

With the vastly outnumbered middle class down at the truck and van rental dealership are pricing moving trucks.

Michael Reagan, the eldest son of President Ronald Reagan, is a Newsmax TV analyst. A syndicated columnist and author, he chairs The Reagan Legacy Foundation. Mr. Reagan is an in-demand speaker with Premiere Speaker's Bureau. Read Michael Reagan's Reports — More Here.

Michael R. Shannon is a commentator, researcher for the League of American Voters, and an award-winning political and advertising consultant with nationwide and international experience. He is author of "Conservative Christian's Guidebook for Living in Secular Times (Now With Added Humor!)" Read Michael Shannon's Reports — More Here.