Several victims of the recent Los Angeles wildfires are calling on California Governor Gavin Newsom to ask for the resignation of Insurance Commissioner Ricardo Lara. They blame Lara for a controversial deal he made with insurance companies that seems to have allowed tens of thousands of policyholders to lose their coverage just before the fires broke out.
In 2023, Lara reached an agreement with several insurers intended to address the state’s homeowners insurance crisis. The deal aimed to prevent insurance companies from pulling out entirely from fire-prone areas by letting them drop some policyholders in exchange for future rate increases. This was supposed to keep those affected out of the state-run California FAIR Plan, which offers a last-resort form of coverage but often with less protection.
However, the plan backfired for many homeowners. Branislav Kecman, whose home was destroyed in the Eaton Fire, shared how his family paid insurance premiums to State Farm for over a decade before being dropped just months before the fire. They were then shifted into the FAIR Plan, where their coverage was weaker. Kecman called the situation a betrayal, saying he never expected the person charged with protecting consumers to make deals that hurt families like his.
Another resident from Pacific Palisades, Jill Spivack, who lost her home in the wildfire, described endless delays and claim denials after her carrier dropped her following 25 years of coverage. “Gov. Newsom, your words gave us hope. Now we need your actions,” she said, urging the governor to act on behalf of Californians.
Consumer advocates have also voiced strong criticism. Carmen Balber, executive director of Consumer Watchdog, accused Lara’s agreement of siding with insurance companies and enabling them to abandon vulnerable communities. She warned that the deal allows insurers to raise rates and avoid covering the highest-risk fire areas, while shifting costs onto homeowners. She called on Governor Newsom to appoint a commissioner who will prioritize families over insurance industry profits.
Responding to the backlash, Ricardo Lara defended the deal, saying it was designed to build a “Sustainable Insurance Strategy.” He emphasized that previous regulations had failed to guarantee coverage for wildfire-prone areas and expressed a commitment to improving the system and protecting those who need insurance the most.
The New York Times reported that the agreement included loopholes. Insurers can fulfill their obligations by selling policies in areas deemed safer by the state, while largely avoiding the most vulnerable neighborhoods. This has left many Californians exposed when wildfires strike, raising questions about the effectiveness of the new rules.
As the wildfire season continues to threaten communities, the debate over how to ensure fair and reliable insurance coverage remains urgent. Thousands of homeowners are watching closely to see if California’s leaders will take stronger steps to protect families or continue to allow insurance companies to pull back from the state’s most dangerous areas.