For Rex Frazier, president of the Personal Insurance Federation of California, the new rule comes as little surprise.
"This is a straightforward implementation of SB 824," he said, noting that state insurers participated in negotiations over the legislation and ultimately supported it.
But he challenges Lara's assertion of it being a statewide problem.
“This isn’t really a statewide issue so far. It's really confined to at most 10 counties,” Frazier said.
No models or mapping predicted the catastrophic wildfires of the last two years, he said. As a result, the state's insurers have taken on an enormous level of risk without being able to raise rates accordingly.
"It’s a policy choice the state has made," he said. "They wanted to protect consumers and hold rates down. Holding rates down worked as long as risk was low."
But now, he said, in order to smooth things out for residents in higher-risk areas, statewide average rates need to increase so the burden can be more evenly shared.
"The question is: How do we have an insurance system that has enough money coming through it to pay for these losses?"