California’s insurance crisis has left homeowners scrambling for coverage, businesses paying soaring premiums and thousands of residents forced on to the state’s insurer of last resort after major companies pulled back from the market following years of devastating wildfires.
Now, the race to replace termed-out Insurance Commissioner Ricardo Lara has become one of the state’s most consequential elections, with the three leading candidates offering starkly different visions for fixing what many Californians see as a broken system.
Democratic state Sen. Ben Allen and former San Francisco Supervisor Jane Kim advanced to the November runoff after finishing first and second in June’s primary, while Republican Stacy Korsgaden failed to make the general election despite finishing as the top GOP candidate.
The California Democratic Party added momentum to Allen’s campaign Saturday by endorsing him over Kim during its executive board meeting in San Diego.
Allen won 61% of the 295 votes cast, while Kim received 39%.
Allen has argued his legislative record and work on wildfire resilience make him the best candidate to stabilize California’s insurance market.
The Santa Monica Democrat has highlighted his role authoring Proposition 4, a $10 billion bond measure designed to help California prepare for wildfires, floods and other climate-related disasters.
“I’ve worked with and fought the insurance industry, and I think both are really important in this job,” Allen told the Sacramento Bee.
Allen has also pointed to his work following the devastating Palisades Fire, arguing that experience gave him firsthand insight into the challenges facing homeowners and insurers alike.
He is backed by U.S. Sens. Adam Schiff and Alex Padilla, the Consumer Federation of California, the Sierra Club and California Environmental Voters.
Kim has centered her campaign on a sweeping proposal to overhaul California’s insurance system through what she calls an “insurance for all” model.
Her plan would create a state-run disaster insurance program modeled after New Zealand’s public insurance system, with the goal of guaranteeing coverage for Californians increasingly unable to find affordable policies.
The former San Francisco supervisor has received endorsements from Sen. Bernie Sanders, the California Teachers Association, the California Working Families Party and civil rights activist Dolores Huerta.
But Kim’s campaign has also faced scrutiny over her qualifications.
During a July interview with KCRA, Kim was repeatedly asked whether she had direct experience working on insurance issues.
Instead of answering yes or no, she emphasized her background as a civil rights attorney, community organizer and elected official.
“I spent the last 20 years in this realm, both as an organizer, as a civil rights attorney and also as an elected official; I served on the San Francisco Board of Supervisors and school board,” Kim said. “I’ve really spent my whole life dedicated to championing consumers, and fighting for rules and, programs that really make this economy work for all of us.”
When asked multiple times whether she had experience specifically in the insurance industry, Kim instead argued that the insurance commissioner serves primarily as California’s consumer watchdog.
“I think that there is often sometimes there’s a misunderstanding about what this job actually is. This job is the consumer watchdog office. It is a leadership and policy role to help make the system work for everyday people. That is what I’ve dedicated my career to as a civil rights attorney, as a legislator,” she said.
Kim also clarified during the interview that gubernatorial candidate Xavier Becerra would not have the authority to freeze homeowners’ insurance rates, saying, “he can’t freeze the rates. That’s not an authority granted to the governor’s office.”
Although Korsgaden will not appear on the November ballot after narrowly missing the runoff, the Republican candidate built her campaign around her decades of experience in the insurance industry and argued California needs an insurance commissioner who understands how the business operates.
“California is not insurable right now,” she said during an interview with AgNet News.
Korsgaden has blamed years of regulatory policies for driving insurers out of the state, arguing companies have increasingly stopped writing new policies because California has become too difficult to operate in.
“Insurance companies are looking at the restrictions… and they’re pulling back,” she said.
Her proposed solutions included creating a new division within the California Department of Insurance dedicated to attracting insurers back into the state, increasing market competition and stabilizing premiums.
