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California Insurance Commissioner's Office stops in Santa Cruz County – Santa Cruz Sentinel

SANTA CRUZ – Amid an escalating home insurance crisis locally and statewide, a representative from the California Department of Insurance – the largest state consumer protection agency in the country – will come to Santa Cruz County to discuss recent market changes and answer questions from county leaders.

California Insurance Commissioner Ricardo Lara's office will send a senior speaker to Tuesday's county Board of Supervisors meeting to give a presentation on the issues facing residents in the wildland-urban border region and the state agency's plans to to solve these problems.

As climate change and the impacts of severe weather continue to increase, rates for many of the state's largest home insurers will also rise unless coverage is withdrawn entirely. According to a recent report from the Bay Area News Group, Travelers Insurance recently announced that it would increase rates for hundreds of thousands of policyholders by an average of 15.3%. The news came less than two months after State Farm, the state's largest insurer, announced it would stop covering 72,000 homes across the state, many of them in Santa Cruz County.

“The loss of insurance has had life-changing consequences for many in our community,” said 2nd District Supervisor Zach Friend, who requested the visit to the commissioner’s office. “Residents either pay astronomically higher rates for less coverage or find no coverage at all, putting their homes and what they have worked for at risk.”

Market conditions have forced many homeowners to enroll in the state's FAIR plan as a last resort, which offers significantly less coverage at a higher cost.

Meanwhile, Lara and his team have announced plans to revise home insurance regulations by the end of the year to stabilize the volatile market.

The representative from Lara's office is scheduled to appear before the board no earlier than 1 p.m. Tuesday in the boardroom at 701 Ocean St., Room 525, Santa Cruz.

To provide another opportunity for the public to engage more directly with experts on this issue, the Commissioner's representative will also participate in a follow-up community education and preparation workshop in Scotts Valley later that same day.

This meeting is scheduled for Tuesday from 6 to 8 p.m. at the Performing Arts and Cultural Center, 251 Kings Village Road, Scotts Valley. It includes presentations from Cal Fire, Firewise and the Scotts Valley Fire Department. Scotts Valley Vice Mayor Derek Timm will moderate a panel discussion with United Policyholders, Kassidy Insurance Brokers and the Realtors Association.

Approve expansion of the center

Also on the board's agenda for Tuesday is consideration of a contract extension with 4Leaf Inc., which was hired after the CZU Lightning Complex fire to assist residents with permitting and general recovery services through the Recovery Permit Center.

The permitting center, established in 2021, is set to expire at the end of June, but the proposed $600,000 contract would extend its services to fire survivors for another six months. During this time, County staff plans to create an integrated service model that incorporates 4Leaf staff into the Environmental Health Division of the County Department of Community Development and Infrastructure.

CZU survivors would continue to receive priority customer service, same-day and on-site appointments, and expedited pre-approval and building permit review, the county said in a statement. The recommended actions include approving the first phase of a transition plan to integrate the recovery permitting center into the county's unified permitting center.

This item is included in the regular agenda and will be discussed after the meeting begins at 9:00 a.m

Bond issue

As the county's infrastructure struggles to recover from the eight state-declared disasters it has experienced since 2017, the board will also consider authorizing the issuance of up to $95 million in bonds to to deal with the growing cash flow problems.

According to the staff report, from 2017 to 2023, the county has accumulated more than $250 million in claims that are eligible for reimbursement from the Federal Emergency Management Agency. The problem is that only about 50% of those claims – more than $125 million – have been paid back so far, leaving the county spending money on urgent repair work, particularly on roads, that it won't complete for another six or seven over the years.

The bonds would help provide the county with the necessary funds to maintain operations while it waits for reimbursement. According to the staff report, this capital funding is the largest in the county's history.

This point will probably not be discussed until the afternoon meeting after 1 p.m

When you go

What: Santa Cruz County Board of Supervisors meeting.

Only at 1 p.m.: Presentation by a representative of the California Department of Insurance. It also proposes to authorize the issuance of up to $95 million in bonds.

Morning meeting, after 9 a.m.: Proposed six-month extension of 4Leaf Inc. contract and Recovery Permit Center services.

Where: 701 Ocean St., Room 525, Santa Cruz or Zoom: us06web.zoom.us/j/81732202363

Anna Harden

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