California Insurance Commissioner John Garamendi issued the following statement in response to the recent Court of Appeal’s ruling on the state’s authority to regulate homeowners’ insurance: “The ‘use it and lose it’ insurance syndrome is a very real problem with very real victims. There is not a homeowner in California who doesn’t hesitate before filing a legitimate insurance claim. They have a very real and justified fear that they may lose their insurance or be forced to pay significantly more in premiums. I have heard the increasing complaints from homeowners about this problem. They have provided strong evidence that insurers, when pricing their policies, too often rely on flawed computer databases with inaccurate and incomplete information. In addition, insurers in many cases virtually ignore the risk of future loss, choosing instead to hike premiums or discontinue policies just because a legitimate claim has been filed. Homeowners, who should gain peace of mind through a policy that is supposed to protect their most important investment, are afraid to even use the policy. ‘Use it and lose it’ is unreasonable, and I will continue my fight until it ends. The court decision is now being reviewed by my Department’s attorneys. We will determine the next step on the emergency regulations after they have completed their work.”
Topics Homeowners
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