Assemblyman Carl DeMaio yesterday announced his bill, AB 567, a “Cap and Cut” plan he says will shield homeowners from massive rate spikes by capping increases for four years while driving down the cost of insurance and reducing wildfire risks.
CBS8 coverage…
More on the legislation from DeMaio’s website.
One of our readers, Dan, added some detailed content in a comment…
The news coverage was woefully misleading. Since DeMaio almost certainly knows price controls lead to shortages, he blames the correct entity on his website:
DeMaio’s bill would cap rate increases at no more than 7% a year for the next 4 years – and would force the state government to cover any insurance costs above the annual cap. DeMaio’s bill is expected to save the typical homeowner thousands of dollars and prevent a larger crisis from forming in the state’s housing market.
“California homeowners should not be forced to pay for the gross negligence of state politicians who have created this insurance crisis with their insane and costly regulations,” DeMaio says.
“The only way for us to streamline insurance costs and reduce wildfire risk is to penalize the politicians for the financial costs of their policy failures by taking funds from the state’s budget,” DeMaio says. “My theory with AB 567 is that politicians will clean up the mess they created only when they are forced to share in the pain of the problem,” DeMaio notes.
The bill only caps the price increases for the homeowner, not the insurance companies, which need to profit to survive. Ironically, CBS 8’s misleading reporting will likely work in the bill’s favor if it reaches the ballot box since voters can reliably be counted upon to vote for economic ruin thinking it’s going to “help”. Will be fun to watch this one play out.
Comments 2
The news coverage was woefully misleading. Since DeMaio almost certainly knows price controls lead to shortages, he blames the correct entity on his website:
“DeMaio’s bill would cap rate increases at no more than 7% a year for the next 4 years – and would force the state government to cover any insurance costs above the annual cap. DeMaio’s bill is expected to save the typical homeowner thousands of dollars and prevent a larger crisis from forming in the state’s housing market.
“California homeowners should not be forced to pay for the gross negligence of state politicians who have created this insurance crisis with their insane and costly regulations,” DeMaio says.
“The only way for us to streamline insurance costs and reduce wildfire risk is to penalize the politicians for the financial costs of their policy failures by taking funds from the state’s budget,” DeMaio says. “My theory with AB 567 is that politicians will clean up the mess they created only when they are forced to share in the pain of the problem,” DeMaio notes.”
The bill only caps the price increases for the homeowner, not the insurance companies, which need to profit to survive. Ironically, CBS 8’s misleading reporting will likely work in the bill’s favor if it reaches the ballot box since voters can reliably be counted upon to vote for economic ruin thinking it’s going to “help”. Will be fun to watch this one play out.
Carl has already rejected Christ’s morality on homosexuality and now he opposes free markets? The State is the problem not the solution. Anyone remember Prop 103 in 1988. Markets work fine when we don’t separate the consumer from the producer. See prohibition. Give me a break Carl.