Consumer groups caution legislators about California budget trailer bill

Consumer organizations in California have issued a warning to state senate and assembly leaders regarding a proposed budget trailer bill that could have significant implications for insurance rate reviews. The bill, if passed, would cut the public out of the process, according to watchdogs.

The warning was issued by six consumer organizations, including Consumer Watchdog, Consumer Federation of California, and Consumers for Auto Reliability and Safety. In a joint letter, the groups expressed concerns that the proposed bill could limit consumer intervention and transparency in the review of insurance rate increases.

The letter highlighted the impact of consumer interventions in the past, citing savings of $6 billion by Consumer Watchdog and over $400 million by the Consumer Federation of California Education Foundation. The groups fear that these savings could be at risk if the proposed bill is enacted.

Consumer Watchdog specifically pointed out several key concerns with the bill, including the exclusion of consumer opinions in rate increases below 7%, limited information for the insurance commissioner to decide on rates, and the removal of public participation in rate increase approvals.

The consumer organizations also raised alarm about the potential for insurers to apply for multiple rate increases in a year to avoid public hearings, leading to higher rates for Californians. They called on lawmakers to ensure that insurers cover individuals who meet state home hardening and brush clearance guidelines to prevent greater liability under the FAIR plan.

The groups emphasized the need for transparency and consumer protection in the insurance rate review process, urging lawmakers to consider the implications of the proposed bill on California policyholders. The outcome of the bill could have far-reaching effects on insurance rates and consumer rights in the state.