APCIA: New York Times’ Article Presents Misleading Narrative on California’s Insurance Market

Adam Shores, Senior Vice President of State Government Relations of the American Property Casualty Insurance Association (APCIA), sent the following letter to the editor of the New York Times this week, responding to the article, "California Promised Insurance Relief, But Delivered Loopholes":

Your Nov. 1 story, "California Promised Insurance Relief, But Delivered Loopholes" presents a misleading narrative that undermines the accuracy of the situation in California's insurance market.

The Times claims that California's creation of "distressed" areas - intended to provide coverage guarantees for property owners in areas at high risk for wildfire - has been compromised by "loopholes quietly negotiated by the insurance industry."

The article suggests that insurers had sway over which parts of the state were designated as distressed. This is incorrect. The California Department of Insurance independently developed a formula to determine these designations, based on areas of the state determined to be high and very high wildfire risk. The formula was based on CAL FIRE's Fire Hazard Severity Zones, along with zip and county level data showing elevated concentrations of policies in the California FAIR Plan. The insurance industry had no role in defining these areas.

The article also implies that the growth of the state's FAIR Plan signals a failure of CDI's approach. In reality, it reflects the transitional phase of California's Sustainable Insurance Strategy. While regulations were finalized in December 2024, implementation is still underway. Rate filings using these models are now being submitted under California's prior approval system- but none have been approved yet.

The Times story overlooks this critical timeline as well as the added strain from the historic Los Angeles fires. The reforms are recent, and their impact is still unfolding. Suggesting failure at this stage misrepresents the facts and risks undermining public confidence in a strategy designed to stabilize coverage in high-risk areas.