Warning Issued by Consumer Watchdog Regarding Commissioner Lara's Agreement with Insurers

Consumer Watchdog warns homeowners in California about a questionable deal struck by Insurance Commissioner Ricardo Lara with the insurance industry. The deal promises more home insurance options but may only offer low-benefit, high-cost policies similar to the FAIR Plan. In a video alert, Consumer Watchdog's executive director, Carmen Balber, criticizes the deal as a bait-and-switch tactic that won't benefit new homeowners.

Despite Lara's plan to deregulate insurance companies in exchange for a commitment to cover high-risk areas, internal documents obtained by Consumer Watchdog suggest that insurers may only provide limited coverage with high costs. The video highlights the inadequacies of FAIR Plan policies, which require homeowners to purchase additional coverage to fill in gaps in protection. While FAIR Plan and standard home insurance cover fire, smoke, and lightning damage, additional perils like windstorm, hail, and vandalism may require extra payments under the FAIR Plan.

Commissioner Lara testified before an Assembly Insurance Committee oversight hearing but failed to disclose the specifics of the policies insurance companies could offer. The overall concern is that the deal may not improve the insurance options for homeowners in California and could potentially leave them with insufficient coverage. In conclusion, the video suggests that the insurance industry is getting what it wants from Commissioner Lara in exchange for a vague promise of expanded coverage in California.