Business
California issues landmark rules to improve home insurance market
Landmark regulations intended to encourage insurers to write more policies in risky wildfire neighborhoods through the use of complex computer models were released Friday by the state.
Under new rules intended to stabilize California’s troubled home insurance market, insurers will be able to set rates by drawing on a wide swath of meteorological, geographic and other data in establishing rates, rather than largely relying on historical losses.
The insurance industry argued the change was imperative given global warming’s role in a number of wildfires, including in 2017 and 2018 when thousands of homes burned down. In setting their rates, insurers also must account for efforts to make properties fire resistant.
“With our changing climate we can no longer look to the past. We are being innovative and forward-looking to protect Californians’ access to insurance,” Insurance Commissioner Ricardo Lara said in a statement.
The new regulations — a central element of Lara’s Sustainable Insurance Strategy — drew support from the industry and others, including farm and environmental groups, but a mixed response from consumer advocates. Los Angeles group Consumer Watchdog contends that the computer models will be a “black box” that will lead to sharp premium hikes.
The regulations that take effect Jan. 2 arose out of a broad agreement Lara reached with the industry that gave insurers regulatory concessions, including the use of the computer models, in exchange for a commitment by large insurers such as State Farm, Farmers and Allstate to write policies in neighborhoods prone to wildfires equivalent to 85% of their statewide market share. That would mean, for example, an insurer with a 10% share of the state’s homeowners insurance market would have to cover 8.5% of the homes in riskier neighborhoods as identified by the department. No such requirement currently exists.
The changes come as residents living in mountainous and hillside neighborhoods have found insurance harder to come by, forcing them to buy bare-bones policies from the FAIR Plan, the state’s insurer of last resort, which has seen its risk exposure mushroom from $153 billion in 2020 to $458 billion as of September.
The regulations establish a process by which the computer models, which are developed by companies such as publicly traded Verisk Analytics, can be reviewed by the state and the public. The department also said it has hired an expert in a newly created position to oversee the process of “examining model integrity and ensuring public review.”
Consumer Watchdog has argued that the review process will still allow the modeling companies and their client insurance companies to keep essential elements of the proprietary models out of the public’s eye, violating the public review provisions of Proposition 103, the 1988 initiative spearheaded by the group that rewrote the state’s insurance regulations.
It also contends there are loopholes that will allow insurers to skirt the 85% coverage threshold.
“Consumers should expect large rate hikes but not more insurance policies sold under the new rules,” Carmen Balber, executive director of Consumer Watchdog, said in a statement.
Michael Soller, Lara’s chief spokesperson, disputed the criticisms and said the department’s regulatory review process gives it the authority to prevent unwarranted rate hikes and to ensure that insurers are making progress in meeting the 85% coverage goal.
“We don’t get this done unless we have companies writing policies. If you don’t write the policies, you don’t use the tools,” he said.
Amy Bach, executive director of San Francisco group United Policyholders, acknowledged there was “wiggle room” in the regulations regarding the coverage threshold, but she expected there would be negotiations as insurers file for rate hikes and are pushed to meet the 85% figure.
“The principle is there, the concept is out there, the deal is out there, and honestly, there’s no other solutions on the horizon that are anywhere close,” she said.
The department noted support from the Environmental Defense Fund, which was quoted stating the models “are essential for modeling perils like flood and wildfire that are now worsening as the planet warms.” Also cited was the California Farm Bureau, which said the models should increase insurance access for farmers.
The American Property Casualty Insurance Assn., a national trade association representing home, auto and business insurers, released a statement that called California’s current insurance regulations “outdated” and “too slow to respond to rapidly evolving conditions.”
“California will continue to have a robust regulatory and rate approval process that guarantees that rates reflect the actual cost of covering claims. We look forward to working with [the department] to implement these new regulations and make sure they are efficient and workable,” it said.
The luxury shopping center in Pacific Palisades will reopen next month after more than $100 million in renovations forced by the January 2025 wildfire that devastated the Los Angeles neighborhood.
Palisades Village will reopen Aug. 15, owner Rick Caruso announced Wednesday. The outdoor center survived the blaze that destroyed homes and other businesses but needed refurbishment to eliminate contaminants that the fire could have spread.
Crews are putting finishing touches on mall buildings after tearing them down to the studs, treating the wood and rebuilding the walls, Caruso said.
“Everybody’s working, and stores are moving their products in,” he said. “It’s a really cool feeling that people have really locked arms and are working together.”
An electrician installs lighting for a restaurant at Rick Caruso’s Palisades Village on Thursday. The shopping center is scheduled to reopen mid-August.
(Myung J. Chun / Los Angeles Times)
Pacific Palisades resident Allison Polhill, who is rebuilding the home of 30 years that her family lost in the blaze, said she is “thrilled” at the prospect of returning to the mall she used to frequent. Its comeback is a boost for the community, she said.
“Every single step that we make to reopen our commercial corridors is going to bring more people back into the Palisades,” said Polhill, who expects to move back into her home at the end of August.
A total of 6,822 structures were destroyed in the Palisades fire, including more than 5,500 residences and 100 commercial businesses, according to the California Department of Forestry and Fire Protection.
Caruso previously attributed the mall’s survival to the hard work of private firefighters and the fire-resistant materials used in the mall’s construction.
The $200-million shopping and dining center opened in 2018 with a movie theater and a roster of upmarket tenants, including Erewhon, which may be the only grocer in the heart of the fire-ravaged neighborhood when it opens.
Caruso’s company was able to fill the mall with tenants despite the long shutdown.
Palisades Village is 99% leased, with the majority of tenants returning, said Jackie Levy, chief financial and revenue officer. Nearly one-third of the shops and restaurants are new to the property.
A firefighter carries a hose back to his rig while walking through a destroyed home from the Palisades fire in Pacific Palisades on Jan. 7, 2025.
(Genaro Molina / Los Angeles Times)
Last year, Pacific Palisades-based fashion designer Elyse Walker said she would reopen her eponymous store in Palisades Village after losing her 25-year flagship location on Antioch Street to the inferno.
Other neighborhood shops destroyed in the fire that are reopening at the mall include K Bakery and Loomey’s Toys, which caters to children up to age 12 and used to be across the street from Palisades Elementary Charter School.
“It’s been a journey and I’m excited because I wasn’t sure that there was going to be a place to come back to,” said toy store owner Amanda Rastegar. “Hopefully we can bring some of that magic back.”
Rastegar’s home in the Palisades survived but was damaged by the fire. The family returned about eight weeks ago. Her last memory of the fire was a burning supermarket.
“I just couldn’t wrap my brain around what was happening,” she said. “By the time I left, Gelson’s was on fire.”
Among the returning tenants is Angelini Ristorante & Bar. Well-known Los Angeles chef Gino Angelini said he will be in the kitchen next month for a return of the Italian restaurant.
“We won’t do a big celebrity open,” he said. “We want to have a very soft opening and see our customers come back.”
Construction takes place at Rick Caruso’s Palisades Village on Thursday. The shopping center is scheduled to reopen mid-August.
(Myung J. Chun / Los Angeles Times)
An elaborate celebration would not feel “correct for me,” Angelini said, because the devastation has been “very sad” for so many.
Other new tenants include local chef Nancy Silverton, who has agreed to move in with a new Italian steakhouse called Spacca Tutto. Women’s activewear retailer LESET will open its first West Coast location.
Caruso said he is optimistic that customers will return to the center, even though many Pacific Palisades residents are still dispersed. One tracking system estimated that about 30% of the Village’s customer base was impacted by the fire, he said.
“That means 70% did not get impacted, so there’s a lot of customers still left out there,” Caruso said. Historically, the center drew customers from as far away as Beverly Hills and Calabasas, as well as Malibu, Brentwood and Santa Monica.
He also hopes many will be inspired to visit the revived mall.
“I believe in the goodness of people and I believe that people are going to want to support the Palisades,” he said. “They’re going to want to be there and support the businesses that have had the courage and the heart to reopen.”
Walmart is rapidly expanding its network of electric vehicle chargers designed for customers to use while they shop.
The network could help fill gaps in EV infrastructure in states with greater need for chargers. Walmart, which has more than 5,000 locations in the U.S. and hundreds in California, says more than 90% of Americans live within 10 miles of one of its stores.
The chargers also offer an incentive for customers to choose Walmart — Walmart Plus members will receive a 10% discount off an average price of $0.46 per kilowatt-hour of energy at the company’s chargers.
Walmart chargers are already available at more than 75 locations in 17 states, with Texas boasting the most charging stations, followed by Florida and Arizona.
Matthew Nelson, Walmart’s director of energy policy, said last week on LinkedIn that the network will soon reach 29 states, including California.
“We are delivering on the promise of affordable, reliable and convenient charging,” Nelson said in his post.
According to Walmart’s website, six charging stations are coming to California soon, though the company did not offer a specific timeline.
The chargers will be installed at stores in Antelope, Brea, Fresno, Stockton, Suisun City and Vallejo.
Most charging sites in California will include eight to 16 fast-charging stalls, said Walmart spokesperson Kelsey Bohl.
The company first announced plans in April 2023 to install its own EV chargers at Walmart and Sam’s Club stores, with a goal of installing thousands of chargers by 2030. Partnering with ABB E-Mobility and Alpitronic, it added 25 new charging sites this past May and six more in June.
“Walmart is building a leading retail-integrated EV fast-charging network, focused on delivering an affordable, reliable and convenient charging experience where customers already shop,” Bohl said in an emailed statement. “Customers can charge while they shop, access stations through the Walmart app they already use, and benefit from affordable pricing.”
The charging stations already available include 612 individual charging stalls using 400-kilowatt chargers. Each stall has a dual charging cord with both Combined Charging System and North American Charging Standard connectors. The standard connectors, designed by Tesla, are smaller and lighter than the combined systems.
The primary way to pay for the chargers is through the Walmart app, but the company is also experimenting with built-in credit card readers to allow those without the app to use the stations.
Customers can check charger availability on the Walmart app. The company said the chargers will be available 24 hours a day.
Robotaxis could be turning into robocops.
A self-driving Waymo reported two teens to San Mateo, Calif., police on Monday after they were found drinking alcohol and shooting toy guns in the back of the vehicle.
According to a social media post from the San Mateo Police Department, officers detained two 15-year-olds after the Waymo they were riding in contacted the department and stopped in a parking lot until law enforcement arrived.
“Parents do you know where your teens are?” the San Mateo Police Department wrote on Facebook following the incident. “Waymo does!”
Officers removed both teens from the vehicle and determined they were using toy guns to shoot Orbeez out the windows. Orbeez are small, water-absorbing beads sold at toy stores.
“Toy guns, water guns, and BB guns all pose real dangers, especially to an untrained eye,” the Police Department said. “The simple handling of them can cause fear in [passersby].” “
A video posted on Facebook shows at least five officers and a police dog responding to the scene and approaching the Waymo with their weapons raised.
Waymo did not immediately respond to a request for comment.
Waymo vehicles have internal cameras and microphones that may be used in an emergency or to “promote safety and security,” according to Waymo’s online support page.
The cameras are also used to ensure the vehicles are clean and to help find lost items, according to the support page.
The company said it does not use facial recognition or other biometric identification technologies to identify individuals.
“In more urgent circumstances, support may access live video during a trip,” the Waymo page said.
The San Mateo Police Department’s Facebook post has garnered nearly 60 comments, with one user accusing Waymo of “snitching.”
“At least they got a designated driver?!” one user commented.
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