Should this guy pay the same price for life insurance that you do?

Insurance is priced to reflect risk—or else it doesn't work.

But California lawmakers are considering bills that could prohibit insurance companies from factoring in risk of a property when setting the premiums for their customer base. As Californians struggle with a housing affordability crisis, legislation could impact affordability and force all California homeowners to subsidize the costs of those who live in riskier areas.

Homeowners insurance costs more in riskier areas of the state because the price of insurance must reflect the risk involved. Prohibiting the ability to properly price risk could require the costs of insurance to be spread over all homeowners, rather than protecting the current system where each individual homeowner pays for the risk they choose to take on with their homes. This would force homeowners around the state to subsidize costs for those living in riskier areas.

For every $1,000 increase in home prices, 15,000 families are priced out of home ownership. Legislation that could have the unintended effect of increasing insurance cost for all homeowners—not just those in riskier areas—would exacerbate California’s affordable housing crisis.

We must protect the equitable system we have today.

California’s system ensures homeowners insurance is accessible while protecting homeowners from having to subsidize the costs of others.