Legislation follows leading insurance companies pulling back from states prone to natural disasters and hiking insurance prices for consumers, leaving families in the path of the fires with only bare-bones insurance or no coverage at all
Washington, D.C. — Today, U.S. Senator Adam Schiff (D-Calif.) introduced the Incorporating National Support for Unprecedented Risks and Emergencies (INSURE) Act, legislation to stabilize the home insurance market by creating a federal catastrophic reinsurance program. This bill will help keep insurance premiums affordable and provide more insurance options for Californians.
“Too many families and small businesses are struggling to keep up with the rising costs of insurance, and steep year-after-year price increases are simply unsustainable. Significant steps must be taken to address this crisis, and the INSURE Act is one of them. This bill would create a federal risk reinsurance pool to bring down costs and make policies more affordable. All across America, in fire zones and flood plains and well beyond, the most valuable property a family may own is becoming uninsurable. This must be addressed with urgency,” said Senator Adam Schiff.
“As the frequency of climate-related disasters increases, this legislation is a crucial step toward ensuring that more Americans are covered when natural disasters occur. People deserve to able to access to affordable insurance coverage to ensure their property is protected, and this bill would be an important step in the right direction.” said Senator Mazie Hirono.
“As natural disasters become more frequent and severe, families should not be punished with skyrocketing insurance costs or losing their coverage altogether. This bill will ensure homeowners – regardless of their zip code – can access affordable and comprehensive insurance coverage,” said Representative Salud Carbajal.
“Thousands of Angelenos lost everything in the recent LA fires because their homes weren’t insured—not because they didn’t try, but because it wasn’t available. That is unacceptable. The last thing families should have to worry about when fleeing disaster is their insurance. With the climate crisis increasingly causing catastrophes—especially here in California—I am proud to introduce the INSURE Act, which would ensure that all Americans can access extensive, affordable home insurance,” said Representative Sydney Kamlager-Dove.
“As climate change drives more intense and more frequent floods and wildfires, Californians are increasingly unable to find affordable insurance coverage. The insurance industry is on an unsustainable path—climate-fueled disasters are causing ever larger losses and American families are left holding the bag. The INSURE Act will bring stability to the American insurance market, reducing premiums and ensuring families are protected by creating a federal reinsurance program to help insurers cover catastrophic losses,” said Representative Doris Matsui.
“Households all across the United States are being dropped by their home insurance companies and struggling to find replacement protection at a price they can afford. We are in the grip of an unprecedented national insurance crisis. The marketplace has changed dramatically for the worse, and theINSURE ACT can be the national solution we need. State insurers of last resort were not built to handle this crisis. As extreme weather events grow more frequent and severe, insurance companies are cutting back on where and what they will cover, leaving millions of Americans vulnerable to disasters and financially strapped. This bill offers the innovation we need to keep families and communities resilient to disasters,”said Amy Bach, co-founder and Executive Director, United Policyholders.
The occurrence of natural disasters as a direct result of climate change has dramatically increased in frequency and severity over the last several decades. Reinsurers and insurance companies alike, have responded with massive price increases that lead to higher premiums or insurers exiting the market entirely, as has been the case in states like California, Florida, Texas and Louisiana, leaving many in high-risk areas underinsured. By creating a public reinsurance program, the federal government will give insurance companies a fairly priced alternative to the private reinsurance market.
Homeowners and small businesses around the country are facing an insurance affordability crisis. A federal investment is long past due to address this crisis and ensure that homes remain insurable in the face of catastrophic natural disasters.
Specifically, the INSURE Act would:
- Establish a Federal Catastrophe Reinsurance Program within the Department of the Treasury to cap the liability of insurance companies in the case of a catastrophic event above a threshold developed by the Secretary and an advisory committee of experts.
- Require participating insurers to cover all natural disasters, including wildfires, severe storms, wind, hurricanes, flood, and earthquakes.
- Require significant investments from insurance companies in loss prevention and risk mitigation partnerships with policyholders.
- Improve market monitoring through the Office of Financial Research and the Federal Insurance Office in collaboration with state insurance regulators.
In the Senate, the bill is co-sponsored by U.S. Senator Mazie Hirono (D-Hawai’i).
U.S. Representatives Sydney Kamlager-Dove (D-Calif.-37), Salud Carbajal (D-Calif.-24) and Doris Matsui (D-Calif.-7) are introducing companion legislation in the U.S. House of Representatives.
The bill has been endorsed by United Policyholders, Real Reform Louisiana, and Strategic Action for a Just Economy (SAJE).
Full text of the bill is available here.
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