California’s June 2 primary ballot runs long. Far down it sits the race for state insurance commissioner, an office with unusual authority over homeowners, auto, business, workers’ compensation, medical malpractice, bail, and other insurance lines.
Health insurance largely sits elsewhere, under a different agency. Only 11 states elect insurance commissioners, and California has done so since voters passed Prop 103 in 1988.
Most voters spend little time on the race. This year, according to Beinsure analysts, they shouldn’t treat it like ballot clutter.
The office matters because California’s homeowners insurance market has entered a hard crisis. Natural disasters have grown more frequent and destructive, and insurers have narrowed coverage across fire-exposed communities.
State law doesn’t force homeowners to buy coverage, yet mortgage lenders usually demand it. Households now struggle to obtain a policy at any price. Even after buying one, they don’t always receive timely claims payments.
State Farm sits at the center of the dispute. The company insures 1 in 5 California homes, yet it has faced accusations over repeated delays tied to Los Angeles County wildfire claims.
The Department of Insurance has pursued legal action and has floated possible suspension of State Farm’s license. That would be a major escalation. Ugly, too.
State Farm stopped writing new California policies in 2023. It has also declined to renew thousands of policies in higher-risk areas. Other carriers have taken similar steps, leaving homeowners afraid of cancellation and with fewer alternatives.
The remaining insurers hold more negotiating power in a concentrated market. They ask for higher rates, softer treatment on claims conduct, or both, before agreeing to write policies.
We think this has shifted the market from risk pooling toward risk avoidance.
Jane Kim, California state director of the Working Families Party and a former San Francisco county supervisor, argues the problem starts with market structure. Her campaign proposes a single-payer system for disaster coverage above ordinary home insurance.
Opponents warn it would damage private home insurance in California.
The model, though, draws from New Zealand and similar systems abroad, where government-backed natural disaster coverage has operated with relative success. For California, it offers a possible exit from a standoff between homeowners and insurers.
Kim expected to spend the year building the Working Families Party’s role in its first California gubernatorial campaign since the party launched in the state in 2022.
The insurance commissioner race changed that plan. She told me at a teriyaki shop near LAX that the party kept moving down the ballot and became fixated on the office. Wealth inequality, economic equity, and climate policy all meet there, she said, in a way most voters don’t see.
Most of the 11 candidates, including state lawmakers Steve Bradford and Ben Allen, businessman Patrick Wolff, and Republican insurance agent Stacy Korsgaden, have promised tougher action on slow claims handling.
They also speak about better policyholder education. Those positions poll well and sound sensible. Then comes the industry language.
Several candidates talk about stabilizing the insurance market by attracting more carriers and approving rate changes faster. In practice, that usually means accepting the insurers’ terms: allow higher premiums or watch carriers leave.
The burden then falls on individual homeowners. They trim trees, clear brush, retrofit roofs, and harden properties against fire. California has even backed such work through incentive programs. Many households have done it and still haven’t seen lower insurance bills.
Insurance companies should share goals with climate advocates, at least under a simple financial view. Fewer disasters mean fewer claims. Yet insurers earn investment income from premiums before they pay claims, and substantial investment portfolios remain tied to fossil fuel assets.
Kim says insurers now manage risk mainly by pricing it, then leaving the riskiest homes behind. In the 1970s, competition in home insurance might have helped lower rates, she argues.
In the climate disaster era, companies compete to cancel or avoid risky homes faster. She points to Texas, where insurance regulation remains lighter and many underwriters operate. Home insurance rates there still exceed California’s.
The industry argues that California and other disaster-prone states have become unattractive places to write insurance. The Federal Insurance Office’s 2025 report complicates that argument.
Property and casualty insurers recorded double-digit written premium growth for three straight years. Net earnings more than doubled last year. Return on average equity reached 15.9%, the highest level in a decade, with strong profitability across the sector.
The 20 largest property and casualty insurers reported $69 bn in 2025 net income, up 29% from the prior year. California also has 1 in 8 U.S. homeowners. There is money there. Plenty.
Kim’s proposal borrows from New Zealand’s public natural disaster insurance system. The government provides the first layer of coverage for property damage from specific events, such as earthquakes or volcanic activity. The public plan pays for structural rebuilding, not home contents.
Private insurers cover losses outside that scope. France and Spain also use versions of public disaster coverage layered above private policies.
California already has partial versions of this split, though each carries flaws. The California Earthquake Authority covers earthquake risk, but private interests run it despite its public creation. Mortgage lenders don’t require earthquake coverage, so many homeowners skip it.
The state also created the FAIR Plan in the 1960s as an insurer of last resort for homeowners unable to obtain private fire coverage. Mortgage rules require that fire coverage.
FAIR is privately run, charges high premiums, and spreads claims costs across insurers. It was meant as a temporary bridge to broader coverage. Instead, hundreds of thousands now rely on it and remain exposed to most losses beyond fire.
Kim wants every insured homeowner to receive public disaster coverage automatically as part of a home policy. Premiums would track property value and risk, with one shared risk pool.
Under her model, every homeowner with insurance enters the same program. That structure would reduce fragmentation and limit insurers’ ability to exit the riskiest neighborhoods first.
The design resembles single-payer health insurance in its cost logic. A nonprofit structure would remove shareholder payouts, executive profit pressure, and marketing overhead from the disaster layer.
Premium revenue would still generate investable funds. California then gets the option to direct those funds toward renewable energy, climate adaptation, or other risk-reduction projects.
Policyholders who reduce fire or earthquake risk might receive financial support. The state might invest more in controlled burns, firefighting capacity, and other mitigation work.
Fewer losses would mean fewer claims. According to Beinsure, that is where Kim’s argument differs from the standard market-stability pitch: it tries to make prevention cheaper than withdrawal.
