In a bid to address the rising costs of insurance in California, Governor Gavin Newsom has announced plans to accelerate the approval process for insurance rate increases. The move comes as insurers struggle to cope with mounting expenses related to wildfires and the growing impact of climate change.

The proposed legislation, known as a "trailer bill," aims to reduce the current approval timeline from 84 days to just 60 days. This expedited process could prevent an exodus of insurers from the state and alleviate the financial concerns of residents who have faced policy cancellations.

During a press conference discussing his revised budget proposal, Governor Newsom emphasized the need to stabilize the insurance market and send the right signals to insurers, urging swift action. Under the current system, the Department of Insurance can take significantly longer if consumer advocates or other groups request a public hearing.

Although this change may lead to temporary increases in insurance bills for consumers, proponents argue that it will ultimately make home insurance more accessible. The increased availability of options could also deter residents from relying on the state's "FAIR Plan," an insurer of last resort that offers expensive premiums.

The American Property Casualty Insurance Association's department vice president for state government relations, Denni Ritter, applauded the governor's announcement, stating that the expedited rate review process is vital to addressing California's insurance crisis. Ritter expressed eagerness to collaborate with the Administration, Legislature, and Department of Insurance on this reform, as well as other necessary changes to improve the state's regulatory system and expand insurance availability.

Governor Newsom opted to work with state lawmakers on the trailer bill rather than issuing an executive order to expedite the process. This decision aligns with the ongoing efforts of California's Insurance Commissioner, Ricardo Lara, who has been working with Newsom since last fall to modernize and overhaul the state's regulations. These efforts include allowing insurance companies to use catastrophe models to set rates and charging consumers for reinsurance costs.

By streamlining the approval process for insurance rate hikes, Governor Newsom hopes to address the challenges faced by insurers in California while providing greater accessibility and stability for homeowners, drivers, and businesses. The proposed legislation marks a crucial step towards fixing the state's broken regulatory system and creating a more sustainable insurance market.