California Insurance Commissioner Ricardo Lara said he will allow catastrophe modeling to be used in rate regulation for wildfires, a move he says will help restore insurance options for Californians, including allowing.
It was the latest phase of Lara’s Sustainable Insurance Strategy. Catastrophic insurance losses are defined as those that are larger and affect multiple policyholders as a result of a severe event. California regulations have allowed insurance companies to apply a catastrophe factor to insurance rates based on historical wildfire losses, rules that Lara said has contributed to rate spikes and balloon premiums following major wildfire disasters without fully accounting for the growing risk caused by climate change or risk mitigation measures.
