California homeowners must not ignore this key election race — the choice couldn’t be easier, or more vital

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Once, the contest for California insurance commissioner was an afterthought, a choice between accountants and party hacks. 

Now, it’s one of the most important races on the ballot. The Palisades and Eaton fires last year — and the insurance debacle surrounding them — made that absolutely clear.

Many states appoint an insurance commissioner. California’s position has been elected since 1990, following the passage of a ballot initiative called Proposition 103.

This year, the campaign for insurance commissioner is the only statewide race between two Democrats, neither of whom has actual experience in the insurance industry.  

Despite the shared party label, there is a real choice in this election.

A recent poll by Probolsky Research determined that 57% of voters were undecided even this late in the election cycle.  

That is because very few people know either Ben Allen or Jane Kim, the two finalists. Allen is a state senator who has run into term limits. Kim is a former San Francisco supervisor.

They are both attorneys (shocking) with a long history of being in government and little experience in the private sector. They both tout lofty education credentials, which may or may not be a favorable attribute today.  

I set out to ask each candidate a series of questions. Allen agreed to a telephone interview. Kim insisted on providing written responses. 

I was able to ask Allen follow-up questions. Kim declined one follow-up question and did not answer one of the five original questions.

It is always important to ask a candidate why he or she is running for a particular office. Allen said he had been involved in legislation related to the insurance industry in the state Senate, but was particularly moved by his work with constituents who were victims of the Palisades Fire.  

Kim stated that “the California insurance system is a disaster. Insurers have given us two choices: raise rates on families or they should exit California. Even if they have insurance they delay, deny, and underpay.”  

It is an interesting response, given that the government has had a lot to say about how insurance companies operate in California for the past 36 years.  

When asked what they see as the problem with the current insurance commissioner’s office, neither candidate really answered specifically. Allen stated he thought the current market for insurance did not offer enough competition from private companies. He added that we need to encourage more insurance companies to compete in California.  

Kim said, “This is not a healthy economy for hard-working Californians, this is a hostage situation.”  Presumably she meant the lack of choice for consumers, though her precise meaning was unclear.

When asked to define their priorities, the candidates were clearer.  Kim said: “We will invest some of the billions we currently give to this trillion-dollar industry into making our communities safer from fires.”  

Kim did not explain how those billions would be collected and spent. The funds appear to come from her signature policy of creating a single state fund to cover all property insurance. In other words, she would eliminate private home insurance and create a single-payer system. It would be the first in the country. 

I did not get a chance to ask her how the state would underwrite excessive losses from disasters like the Palisades and Eaton fires.  

Both candidates have commented on the failings of private insurance, but neither has said much publicly about the state’s so-called FAIR Plan, the insurer of last resort.  

Kim declined to answer my question about it. Allen stated that he thought the FAIR Plan did a disastrous job.  

I asked him if he knew the state forced private insurers to cover the losses of the FAIR Plan to avoid asking for money from the general fund. He was not aware. 

I cannot believe that Kim knows how badly the FAIR Plan has performed; otherwise, she would not have suggested a single-payer plan.  

Both candidates have a large list of endorsers.  Kim’s primary endorser is Sen. Bernie Sanders, who shares her hostility to private industry. Allen, on the other hand, wants to work with private industry to reward risk reduction in coordination with communities.

There you have it. One candidate wants a government-run insurance market, and the other wants to expand competition and reduce risk for homeowners. 

They’re both from the same party, but these are two very different choices.

Bruce Bialosky, a former presidential appointee, is a certified public accountant specializing in taxes.

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