Speaker 1: And we continue at one five in the afternoon on
Speaker 1: The John Phillips Show, Mister Randy Weggs in Culver City. John.
Speaker 2: Just a few minutes ago, at a press conference about
Speaker 2: Earth Day, current California Governor Gavin Newsom was asked who
Speaker 2: he likes in the governor's race and if he's going
Speaker 2: to watch tonight's debate on next Star.
Speaker 3: I'm supporting a Democrat in the runoff and look forward
Speaker 3: to the voters making that decision very shortly.
Speaker 1: What if it's two of them or what if it's
Speaker 1: none of them? Boy, he has opinions on everything, whether
Speaker 1: it comes to Iran or Donald Trump, or Ice or
Speaker 1: all of these subjects that really don't have much to
Speaker 1: do with state politics. But if you ask him a
Speaker 1: question about state politics, he turns into Switzerland.
Speaker 2: Well, and his press team likes to comment on anything
Speaker 2: and everything that's trending on social media.
Speaker 1: Didn't have a damn thing to say about Swell. Oh yeah,
Speaker 1: Well the handcuffs who are on? Is? He don't think
Speaker 1: there will be one? Absolutely, confident of that, Shangy, Can
Speaker 1: I get an assist on that. I don't think there
Speaker 1: will be one.
Speaker 3: Absolutely. There are a lot of outstanding candidates with extraordinary records.
Speaker 1: I can name fact check. Yeah, how about that CNN
Speaker 1: article where you said that if Katie Porter gets elected,
Speaker 1: she's going to drive all the businesses out of state. No,
Speaker 1: or that Javier Baccaria was an awful attorney general.
Speaker 3: There are a lot of outstanding candidates with extraordinary records.
Speaker 3: I can name seven of them, though I think there
Speaker 3: were nine with Betty Now, Yeah.
Speaker 1: Who was the other person that dropped out?
Speaker 4: Oh?
Speaker 1: I guess that would be Calderon. He's the one Calderon
Speaker 1: that's not in prison.
Speaker 2: No, he's he's specifically not talking about Swallwell oh, yes, yes, yes.
Speaker 3: Because as as someone that's grown up in state of California,
Speaker 3: I had an opportunity to work with every single person
Speaker 3: that is running for that office, and had the privilege
Speaker 3: of working and partnering with them in many different capacities
Speaker 3: over many many years. And I respect to respect their
Speaker 3: willingness to put themselves out and looking forward to the
Speaker 3: debate tonight, and I'm looking forward to where the voters
Speaker 3: ultimately land.
Speaker 2: Boy, he sounds so checked out as soon as you
Speaker 2: ask him about anything going on in California.
Speaker 1: What is he going to do if he runs for
Speaker 1: president and loses. Podcast. That's what that's all about. Backup plan,
Speaker 1: baby with that voice. He loves it. Okay, this isn't
Speaker 1: like a new thing for him. When he was lieutenant governor,
Speaker 1: he had that TV show on Al Gore's network, Current TV.
Speaker 1: When he was mayor of San Francisco, he would do
Speaker 1: a monthly radio show. He loves the medium of broadcasting.
Speaker 1: You think he'd want to fill in for us when
Speaker 1: we're on vacation.
Speaker 2: I mean, they do say to always make sure that
Speaker 2: the person fills in for you is not as good
Speaker 2: as you, So that'd be great for us.
Speaker 1: What do you think I had in mind? Eight hundred
Speaker 1: two two two five two two two is a telephone number?
Speaker 5: One?
Speaker 1: Eight hundred two two two five two two two. Well,
Speaker 1: tonight is debate night for all the candidates running for governor.
Speaker 1: And we know that the likely scenario is that Katie
Speaker 1: Porter is going to attack Tom Steyer. We know that
Speaker 1: Tom Steyer is going to attack Javy or Besserah. We
Speaker 1: know that Steve Hilton is going to attack Chad Bianco.
Speaker 1: There's gonna be a lot of attacking going on. There's
Speaker 1: gonna be a lot of references to Donald Trump and
Speaker 1: to Ice, maybe even to the war in Iran, but
Speaker 1: California issues that impact California residents probably won't get discussed
Speaker 1: in great detail. One of the subjects that should get
Speaker 1: discussed in great detail is the state's insurance crisis. None
Speaker 1: of us, oh, we know, none of us can buy insurance.
Speaker 1: It doesn't matter if you're a homeowner, a small business owner, whatever.
Speaker 1: The state is quickly becoming uninsurable. Our current insurance Commissioner,
Speaker 1: Ricardo Laura, would rather spend his time with DJ Kitty
Speaker 1: Glitter than fixing the problem. Gavin Newsom, as at a
Speaker 1: point of official policy, has delegated the job of fixing
Speaker 1: the insurance crisis to Ricardo Laura. Clearly that's not working,
Speaker 1: and whoever becomes governor next is going to have a great,
Speaker 1: big mess on their hands. So what they think about
Speaker 1: the insurance crisis actually matters.
Speaker 2: Julie Watts of CBS News Investigates sat down with every
Speaker 2: single candidate a few months ago and has asked them
Speaker 2: every a old, every single candidate, the same questions, and
Speaker 2: instead of releasing here's an interview with Tom Steyer, here's
Speaker 2: an interview with Katie Porter, and yes, I want to
Speaker 2: see that whole interview. She has released these compilations where
Speaker 2: she talks to every single candidate about one specific issue.
Speaker 2: And one of the things that I've noticed they've been
Speaker 2: doing is that when somebody gets taken away by the
Speaker 2: OPA lumpas and the field gets shorter, they release a
Speaker 2: new video and edit the old person out. So, without
Speaker 2: further ado, here is Julie Watts of CBS News California Investigates,
Speaker 2: which I just saw in her email. She's officially the
Speaker 2: California accountability correspondent and I love that. Here is what
Speaker 2: every candidate has to say about insurance, starting with Steve Hilton.
Speaker 2: Although I didn't need to say that, you could tell
Speaker 2: he's the British guy.
Speaker 6: Insur insurance, insurance.
Speaker 7: What do you do to stabilize California's insurance market without
Speaker 7: pushing insurers out of California. We're looking at folks who
Speaker 7: cannot get insurance. How do you keep insurance companies in
Speaker 7: California while still keeping rates down in a world where
Speaker 7: we're seeing climate driven disasters. You have people who live
Speaker 7: here who say I cannot afford to pay the prices
Speaker 7: that they are charging you have a private industry that
Speaker 7: does not have to work here, saying if you keep
Speaker 7: building expensive homes and your burnable things, we cannot ensure that.
Speaker 8: No, but there's so many common sense things you can do,
Speaker 8: for example, So there was I think there's some ledge,
Speaker 8: I mean, I need to dig into it, but that's
Speaker 8: someone in the issuance.
Speaker 1: Wait, you need to dig into it. You know the
Speaker 1: policy on everything. Yeah, he certainly does offer more details
Speaker 1: of the rest of them.
Speaker 8: I think there's some ledge, I mean, I need to
Speaker 8: dig into it, but that someone in the insurance industry
Speaker 8: was telling me that there's a legislation that actually that
Speaker 8: stops something incredibly common sense being done, which is defensible
Speaker 8: space being put around new building in those errors. But anyways,
Speaker 8: as I understand it, that the LAARA, the insurance Commissioner,
Speaker 8: has finally made the changes in how insurance companies can
Speaker 8: prise future.
Speaker 2: Risk, and that hasn't taken anybody off the fair place,
Speaker 2: and it isn't making insurance any more available.
Speaker 1: No, no, No, RICARDA. Laura is not the authority on
Speaker 1: anything except for maybe certain items that can be purchased
Speaker 1: in Colombia. I'm very kind of sketch you cannot delegate
Speaker 1: this very important issue to a buffoon like him. You
Speaker 1: can't do it.
Speaker 2: It's got to be hard for the Republican candidates to
Speaker 2: even talk about this because what Ricardo Laura has done
Speaker 2: is given the insurance companies everything they want and they're
Speaker 2: still screwing us over and they're still not paying out claims.
Speaker 8: Yeah, a lot of people have been asking for for
Speaker 8: many years.
Speaker 9: I mean, you know, that's.
Speaker 6: Sort of a separate issue, but I mean, but.
Speaker 8: Let's let's get you know, there's a massive issue for
Speaker 8: so many Californias. Either these insanely high premiums they're paying
Speaker 8: or they can't get in short a tool and they're
Speaker 8: on the Fair Plan. And we know that the the
Speaker 8: state we're on Fair Plan is a disaster. If anything
Speaker 8: goes roll, that's a massive financial liability.
Speaker 1: This is a huge problem.
Speaker 2: And in fact, Ricardo Lara was the one that changed
Speaker 2: the rules right before the big Palisades and Eden fires
Speaker 2: where it used to be the Fair Plan, which by
Speaker 2: the way, is not a state plan. It is a
Speaker 2: consortium of the insurance companies created after the Watts riots,
Speaker 2: and the whole deal was okay, if you don't want
Speaker 2: to ensure them. You have to have this company insure
Speaker 2: them as the insurer last resort.
Speaker 1: But if you put too many.
Speaker 2: People on that plan and that plan goes belly up,
Speaker 2: you're on the hook for it. Ricardo Lara changed the
Speaker 2: rules to say that the ratepayers are on the hook
Speaker 2: for it.
Speaker 1: Well, and what's so wild about insurance right now is
Speaker 1: we get the worst of both worlds. We have regulations
Speaker 1: that determine what the insurance companies can charge you, which
Speaker 1: I'm not in favor of price control, so I would
Speaker 1: never vote for that. But fine, that's the law. So
Speaker 1: what do we do. We allow them to raise the
Speaker 1: rates the maximum amount every time they ask. That's what
Speaker 1: historically has happened. However, the insurance companies say that's still
Speaker 1: not enough to cover the actual risk. So when you
Speaker 1: need to file acclaim with your insurance company, they just
Speaker 1: say no, and you have to sue them to get
Speaker 1: anything out of them, which delays the entire process of rebuilding,
Speaker 1: and it costs you a fortune, and it destroys your
Speaker 1: mental health and physical health in the process. How anyone
Speaker 1: could look at this and say this is the model.
Speaker 1: I don't understand. You can do what Florida does, which
Speaker 1: is probably what I would do, which is get rid
Speaker 1: of a lot of the regulations, which means the premiums
Speaker 1: would go through the roof. However, if you get paid
Speaker 1: on a claim, then you can actually use it. Then
Speaker 1: if something tragic happens to your home and you need
Speaker 1: to rebuild, or you need to do whatever, you can
Speaker 1: actually get money out of the insurance company. Right now,
Speaker 1: what it is in cal is it's a box to
Speaker 1: check when you get a loan from a bank. The
Speaker 1: banks require you to have insurance, but it's a product
Speaker 1: that you can't actually use in any realistic way.
Speaker 2: I will say, though, when you look at what happened
Speaker 2: in Florida, and Florida is a different situation because of
Speaker 2: all of the risk of flood, which is a big
Speaker 2: majority of the state. You have a lot of people
Speaker 2: who own condos that their insurance premiums tripled, quadrupled in
Speaker 2: the last couple of years to the point where the
Speaker 2: insurance is more than the mortgage payment. And you have
Speaker 2: people trying to sell and leave and nobody wants to buy.
Speaker 1: And that's a different set of problems. But right now
Speaker 1: in California, you can't even buy insurance, and if you
Speaker 1: can buy insurance, you can't use it.
Speaker 8: And so I've spoken to the industry about it, and
Speaker 8: the insurance industry tell me that finally they feel that
Speaker 8: some of these longstanding policy mistakes have been corrected.
Speaker 2: Yes, like using their own proprietory climate model that we
Speaker 2: don't get to see for them to price their risk.
Speaker 1: I don't like that either. And this is also one
Speaker 1: of these weird subjects where the left and the right
Speaker 1: come together. The insurance companies and Greta Thunberg are on
Speaker 1: the same page. They believe that the world is going
Speaker 1: to end eleven years from now. Well, if the world
Speaker 1: is going to end eleven years from now, then you
Speaker 1: can price accordingly. Well, if you're a consumer, that doesn't
Speaker 1: work for you, especially if they won't even show you
Speaker 1: their work.
Speaker 8: And so that they're telling me, I mean, we need
Speaker 8: to dig into it more, and perhaps you could.
Speaker 2: Do some investigation, investigation, And she's done a lot of
Speaker 2: investigations on this, Oh yeah, investigation.
Speaker 8: The insurance industry is telling me that actually things are
Speaker 8: getting back to on the track that they feel they're
Speaker 8: going to come back into the state. Yes, rates are
Speaker 8: going to go up, but at least they're going to
Speaker 8: be able to ensure because they can price risk properly.
Speaker 8: So that's what I'm being told.
Speaker 1: But again, let's look at.
Speaker 2: You know, we're going to get to a point where
Speaker 2: it is so unaffordable to have insurance that people can't
Speaker 2: get a mortgage. And if you can't get a mortgage
Speaker 2: and that industry collapses, what's going to happen.
Speaker 1: Well, it's going to be one of these states where
Speaker 1: the extreme bias is to all cash offers. And if
Speaker 1: the only type of person who can buy a property
Speaker 1: is an all cash offer, then you really are going
Speaker 1: to price the middle class out of the state.
Speaker 8: But again, let's look at another component. Why premiums so
Speaker 8: much higher in California Because building costs are so much
Speaker 8: higher in California.
Speaker 2: Okay, on this one, he's totally right. Just the cost
Speaker 2: of lumber is more expensive in the state of California,
Speaker 2: which means the cost of rebuild is way higher than
Speaker 2: anyone in Eaton Canyon was covered for.
Speaker 8: So of course, if you're insured a building, like what's
Speaker 8: the replacement.
Speaker 6: And most people are under inshirt because.
Speaker 8: Because it costs so much. So if we bring that
Speaker 8: all these things tied together. If we bring the cost
Speaker 8: of building down, that's another way we can bring insurance
Speaker 8: costs down, because it doesn't it costs so much to
Speaker 8: rebuild in the event that something happens.
Speaker 2: One of the things he has advocated for, and it
Speaker 2: sure makes sense to me, is you know, we've got
Speaker 2: all these forests that are way out of control that
Speaker 2: we're not cleaning up. Why don't we reactivate the timber
Speaker 2: industry so there's not as much fuel to burn and
Speaker 2: then we have cheaper lumber that we're not importing from Kanada.
Speaker 2: And when you think about it, yes, land is more
Speaker 2: expensive in California than it is in Utah, Montana, wherever.
Speaker 2: But theoretically the cost of rebuilding should be about the same,
Speaker 2: because the cost of lumber shouldn't be different between one
Speaker 2: state and the next. But just look at gasoline. Look
Speaker 2: at how much more expensive gasoline here is in California
Speaker 2: than everywhere else, and apply the same logic that applies
Speaker 2: to gasoline to other things like timber or whatever, and
Speaker 2: you just run up the costs in this state.
Speaker 9: Sures have to make money. There are two things we
Speaker 9: need to do here, both of them possible, of them
Speaker 9: driven by new technology. And new ideas. One is wildfire control.
Speaker 1: This is a if you can tell we've moved on
Speaker 1: to the most grating voice in the campaign, both.
Speaker 9: Of them driven by new technology and new ideas. One
Speaker 9: is wildfire control. This is a this is a fire ecology.
Speaker 9: They're always going to be fires. What we're trying to
Speaker 9: avoid is devastating fires.
Speaker 2: And we've had some of the most devastating fires in
Speaker 2: the state's history just in the last five years.
Speaker 1: Including in the state's population centers like in Altadena and
Speaker 1: Pacific Palisades.
Speaker 9: And that is something that can be monitored, that can
Speaker 9: be controlled with new technologies. I believe the governor's you know,
Speaker 9: doing it, but I believe we can control.
Speaker 1: I believe you haven't even been following what the governor does. No, no,
Speaker 1: And take the fire in the Pacific Palisades. That was
Speaker 1: a complete failure of government. That was the state getting
Speaker 1: involved in something that they had no business getting involved in,
Speaker 1: and they were the ones that are responsible for that
Speaker 1: fire not being fully extinguished.
Speaker 9: You know doing it, But I believe we can control
Speaker 9: devastating fires. That's the actual issue. But the second thing
Speaker 9: is I believe they're new technologies that are quite inexpensive
Speaker 9: and can be financed to harden houses that have an
Speaker 9: incredibly high success rate, way over ninety percent. If that's true,
Speaker 9: and both of those I believe to be true.
Speaker 2: By the way, there are technologies like that, and I'm
Speaker 2: in the opinion of the insurance companies should pay for
Speaker 2: those if it makes their risk much lower. They should
Speaker 2: be buying you the thing that make sure that you
Speaker 2: have the retardant that flies out of your house when
Speaker 2: the fire starts.
Speaker 1: Whoa, whoa, whoa, whoa, whoa. I thought we weren't allowed
Speaker 1: to use that word anymore.
Speaker 2: Retardent if that's true. The pink stuff, if that's true.
Speaker 1: Minute the health insurance companies, they're willing to buy the
Speaker 1: flu shot, they're willing to buy the gym membership up,
Speaker 1: They're willing to pay for any number of things that
Speaker 1: are proactive to keep you out of the er. So
Speaker 1: I think that you have a point there, Randy, that
Speaker 1: the insurance companies I think would be willing to incur
Speaker 1: at least some of those costs. Oh they're not.
Speaker 2: In fact, we never got to it, but there was
Speaker 2: a Julie Watts investigation for a few weeks ago on
Speaker 2: how insurance companies are adding all these things in the
Speaker 2: Bay Area, like earthquake detectors what have you, that you
Speaker 2: have to foot the bill for or they won't cover you.
Speaker 9: If that's true, and both of those I believe to
Speaker 9: be true, we should go to insurance companies. This is
Speaker 9: the biggest insurance market in the United States of America.
Speaker 1: Or when he goes up in Octave, it's even more uncomfortable.
Speaker 1: They want to be here, to be they do not
Speaker 1: want to be here.
Speaker 9: They have to be able to write insurance that makes money.
Speaker 9: The job of the governor is to go to them
Speaker 9: and say, you need to take into account the data.
Speaker 9: We've solved this problem. You can look at it, you can.
Speaker 1: Write, Okay, sef he is the biggest global warming alarmist
Speaker 1: on planet Earth. If he were to get elected and
Speaker 1: they were to use his modeling, the state modeling that
Speaker 1: I'm sure would come from a styr administration, what do
Speaker 1: you think they would use that for?
Speaker 2: Well, this shows the disconnect between the billionaire and the
Speaker 2: people who have average means that are running for this office.
Speaker 2: He has no idea what his insurance premiums are and
Speaker 2: he doesn't care if they go up three hundred or
Speaker 2: four hundred percent.
Speaker 1: No, because it's his secretary that's writing the check.
Speaker 9: Anyway, successful in churance, we insist that you'd get the
Speaker 9: data and charge people fairly for the people who've hardened
Speaker 9: their houses. And to take an account the fact that
Speaker 9: we have as a state dealt with devastating wildfires.
Speaker 1: We have not dealt with devastating wildfires. All right, we'll
Speaker 1: have more from the candidates on the subject of the
Speaker 1: insurance crisis coming up in moments each the John phil
Speaker 1: If you'd like to email the show, you can do
Speaker 1: so at Johnny Don't Like Show at gmail dot com.
Speaker 1: That's Johnny Don't Like Show at gmail dot com and Randy.
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Speaker 1: Otherwise you busted the trust. And you know what they say,
Speaker 1: don't bust the trust. Eight hundred two two two five
Speaker 1: two two two. Easy telephone number what eight hundred two
Speaker 1: two two five two two two. John Morgan joins us
Speaker 1: at the top of the hour. Right now, we're going
Speaker 1: through the interviews between the candidates for governor and CBS
Speaker 1: News is Julie Watts on the subject of California's insurance crisis.
Speaker 1: Let's get back to the candidates.
Speaker 5: So I think we need to think about Oh, you know.
Speaker 2: Whose turn it is, it's our girl. Oh and yes,
Speaker 2: in case you were wondering, this is the same interview.
Speaker 2: It's just you know they released the clips of it
Speaker 2: throughout the year, but this is the exact same interview
Speaker 2: where Katie Porter ripped off the microphone and said, I
Speaker 2: don't want to do this anymore.
Speaker 6: Well to those voters, Okay, so, so I don't want
Speaker 6: to keep doing this. I'm gonna call it. Thank you.
Speaker 6: You're not gonna do the interview with them.
Speaker 9: Nope, not like this.
Speaker 5: I'm not not with seven follow ups to every single
Speaker 5: question you.
Speaker 1: Ask America's sweetheart. I think there will be a moment
Speaker 1: in tonight's debate like that, God willing.
Speaker 5: So I think we need to think about changing some
Speaker 5: of the rules around how insurance companies function in California.
Speaker 5: I think the proposal that the Insurance Commissioner rolled out
Speaker 5: is the right one.
Speaker 1: I think, no, what alternate universe are we living in
Speaker 1: where Ricardo Laura is being treated like some kind of
Speaker 1: elder statesman. It's really bizarre.
Speaker 6: The Insurance Commissioner rolled out you.
Speaker 2: Have what may be the most inapt and corrupt member
Speaker 2: of the entire state government, and that's saying something being
Speaker 2: propped up because they all know that this is a disaster,
Speaker 2: so they want to say this is Ricardo's plan. But
Speaker 2: no one wants to go after because if they come
Speaker 2: up with their own plan, then they'll own the crisis.
Speaker 1: And mind you, the position that all of these candidates
Speaker 1: are taking is the same position that Gavin took the.
Speaker 5: Insurance Commissioner rolled out is the right one. I think
Speaker 5: it came too late. We've already seen too many exits.
Speaker 5: We've already seen rates go up too soon.
Speaker 2: I support the wildfire and one of the things that
Speaker 2: he authorizes that rates can go up faster.
Speaker 1: If they have a hearing that he doesn't attend, and
Speaker 1: prior to the hearing actually starting, he said he was
Speaker 1: going to give him their rate increase.
Speaker 5: I support the wildfire fund. I think that's going to
Speaker 5: be a big part of having a planning case of
Speaker 5: catastrophic wildfire, so that our insurers know that that fund
Speaker 5: is going to be there for them, and people who
Speaker 5: lose their homes know that fund is going to be
Speaker 5: there for them. That fund needs to be recapitalized and restarted.
Speaker 5: That's up right now for debates.
Speaker 2: So that means that what we're going to have the
Speaker 2: insurance companies are getting pretty much reinsurance from us. This
Speaker 2: is so screwed up. No, I'm telling you the entire
Speaker 2: industry is a house of cards. And if we're at
Speaker 2: a point where nothing is insurable and the companies really
Speaker 2: can't make any money anymore unless they raise rates to
Speaker 2: the point where no one can afford a mortgage, I
Speaker 2: don't know what we do.
Speaker 5: That fund needs to be recapitalized and restarted. That's up
Speaker 5: right now for debate in the legislature, and I support
Speaker 5: that fund. Ultimately, I think we're going to have to
Speaker 5: be realistic. The costs of insurance are going up in
Speaker 5: many places. That's not just true in California. That climate
Speaker 5: change is happening everywhere. But the way to bring costs
Speaker 5: down is to make sure we have a lot of
Speaker 5: companies in the marketplace competing on price.
Speaker 2: So we're Shure, Wants, Adriana and Veronica competing over your rate.
Speaker 1: Talk about a cage match.
Speaker 5: So we're not going to be able to bring the
Speaker 5: price down unless we retain those companies.
Speaker 2: So we're going to so we can't bring the companies
Speaker 2: back unless they can charge us as much as they're
Speaker 2: charging in Florida. Great, all right, let's see if Mayheon
Speaker 2: has a better answer. So far, I'm not impressed with anybody,
Speaker 2: and usually they always frontload these things with the front
Speaker 2: runner candidate, So it's Steve Hilton, and usually you're impressed
Speaker 2: by everything he says. And I wasn't impressed with that either.
Speaker 10: So we're going to have to bring back the private
Speaker 10: insurance market. And it's comparable to what we're seeing in energy.
Speaker 10: If we don't have a functioning, competitive market, prices go up,
Speaker 10: and pretty soon we're overly reliant on government to provide services,
Speaker 10: and we don't have the resources to do at the
Speaker 10: scale we would need. We'll have to allow the private
Speaker 10: sector to come back into the insurance market in California.
Speaker 10: That means we have to build a price risk and
Speaker 10: that's not easy. But folks who are living out in
Speaker 10: fire zones, we'll have to pay more. I think the
Speaker 10: state can help offset that by investing in those fire
Speaker 10: breaks and doing more vegetation management to reduce catastrophic risk.
Speaker 1: If way, I like that. So far, this is the
Speaker 1: most coherent answer, and by the way, apropol of nothing.
Speaker 1: I think part of the problem that we have in
Speaker 1: California is that our elected leaders look at insurance companies
Speaker 1: the same way they look at utilities. Utilities will always
Speaker 1: have to do business in California. This is where their
Speaker 1: equipment is, this is where their customers are. They just
Speaker 1: can't pick up their equipment and move to Nevada or
Speaker 1: Delaware or some other state. But with insurance companies, they
Speaker 1: can pull out of the market, and it's quite easy
Speaker 1: for them to do so. And we've seen that happen
Speaker 1: with State Farm. We've seen it happen with Farmers. Others
Speaker 1: have threatened to do the same thing. But if you
Speaker 1: act as if they can't leave the market, if you
Speaker 1: act as if their equipment is here and they're going
Speaker 1: to be here forever, you're going to be disappointed.
Speaker 2: Well it's actually even worse than that because reporting that
Speaker 2: we found out was when Ricardo Laura was crafting his
Speaker 2: system staintable insurance strategy for the last three years, he
Speaker 2: let the executives at State Farm know what he was doing,
Speaker 2: and it actually gave them an incentive to set the
Speaker 2: table for why we needed these regulations. They actually had
Speaker 2: a vested interest in dropping everybody in twenty twenty three
Speaker 2: and twenty twenty four, so Ricarlo Laura could say, we
Speaker 2: need to give them everything they're asking for. This is
Speaker 2: a straight up conspiracy.
Speaker 10: If we have fewer catastrophic fires in the coming years,
Speaker 10: we will not only save lives and property, but we
Speaker 10: will see rates start to come down. And so the
Speaker 10: state has to play How.
Speaker 1: Is he only at five percent? What is wrong with
Speaker 1: the state because writing this Democratic candidate talking about California issues,
Speaker 1: there's no appetite at all among Democratic voters for that, unfortunately.
Speaker 10: And so the state has to play a role in
Speaker 10: better reducing large fire risk.
Speaker 9: And cat catastrophic loss.
Speaker 10: Also, though, need to have a functioning market where private
Speaker 10: insurance companies are competing for people's business versus what we
Speaker 10: have today, or where government's the only backstop and we
Speaker 10: don't have the funds to actually deal with the amount
Speaker 10: of need that's out there.
Speaker 2: Yeah, so if you remember these so so far, that's
Speaker 2: the most coherent answer from Matt Mahan.
Speaker 1: And by the way, don't forget what we learned from
Speaker 1: James Gallagher, who is the Assembly Republican leader, former Assembly
Speaker 1: Republican leader who also represents Paradise, California. He said on
Speaker 1: this program that the Fair Plan is insolvent, which means
Speaker 1: they can't pay you if they owe you money and
Speaker 1: they're your insurance company. And something bad happens, you know.
Speaker 2: Whose turn it is, the surging candidate, the one that
Speaker 2: the machine seems to be getting behind.
Speaker 1: Plan d Javier Bakeria scrub it.
Speaker 11: So if you remember, the insurance market is based on
Speaker 11: spreading risk, right, the more people you have, the more
Speaker 11: you can spread the risk.
Speaker 9: Somebody has a problem.
Speaker 2: It sure seems like every single issue. He has just
Speaker 2: the most basic, rudimentary understanding of it.
Speaker 1: Yep. And this guy is the new one that everyone's looking.
Speaker 1: He's the shiny new object.
Speaker 11: So if you remember, the insurance market is based on uh,
Speaker 11: spreading risk, right, the more people you have, the more
Speaker 11: you can spread the risk. Somebody has a problem, You
Speaker 11: got a whole bunch of other folks who don't spreading risk. Okay,
Speaker 11: you can still make money, So the insurance industry can
Speaker 11: still make money. They just have to know how to
Speaker 11: spread the risk. And what we have to make sure
Speaker 11: is that when we pay them, they're not using that
Speaker 11: money to make investments outside of our state. You want
Speaker 11: money from us, let us show us that you're putting
Speaker 11: the money back in California. So do what I always
Speaker 11: keep saying to you. You got to bring folks in
Speaker 11: early let's take a look at what you're saying. Your
Speaker 11: problem is insurance industry and stay in California. Okay, show
Speaker 11: me your books and if you're telling you, if you're
Speaker 11: telling me, we're not letting you charge enough, show me
Speaker 11: and we'll see.
Speaker 1: And then I guess he needs to scrub it. Oh,
Speaker 1: we're going to do some scrub a dub dub and
Speaker 1: scrub it.
Speaker 6: And that's what Ricardo Laura. So he's doing right now.
Speaker 6: I mean to support what the Insurancemission's doing right now.
Speaker 1: I can't tell you, but Sarah doesn't even know who
Speaker 1: the insurance commissioner is. Nope, I can't tell you. I
Speaker 1: know everything that the insurance Commissioner's doing.
Speaker 11: What I can't tell you is there are still people.
Speaker 2: It's amazing how many people that are running for governor
Speaker 2: do not know. We'll openly admit that they don't know
Speaker 2: anything about what's going on in the state. How could
Speaker 2: you not even familiarize yourself with this information before you
Speaker 2: put your name on the ballot to run the state.
Speaker 2: If you don't think this is a priority issue, you're
Speaker 2: not paying attention. Now for the average California voter, it
Speaker 2: may not be a priority issue, and that's how we
Speaker 2: are where we are.
Speaker 1: I can't tell you I know everything that the insurance
Speaker 1: Commissioner's doing.
Speaker 11: What I can't tell you is there are still people
Speaker 11: in the Pacific Palisades in Altadena who haven't yet heard
Speaker 11: from their insurance company about when they're going to get
Speaker 11: their money or how much they're going to.
Speaker 2: Get Yes, and the Insurance Commissioner is not doing a
Speaker 2: damn thing about that.
Speaker 1: Yeah. Isn't that the job of the California Department of
Speaker 1: Insurance to make sure that the insurance companies fulfill their
Speaker 1: contractual obligations, And that I.
Speaker 11: Would never let stand. I would do what I did
Speaker 11: as secretary, where I had to bring in industry titans
Speaker 11: and said, you have a problem, we have to resolve it.
Speaker 11: We're not leaving this room until we come up with
Speaker 11: a solution.
Speaker 9: We did that.
Speaker 1: He's going to tell the companies you're grounded. Yeah, I'm
Speaker 1: sure State Farm will quiver. There's not a whole lot
Speaker 1: of policy coming out of Besarah No, and don't expect
Speaker 1: to hear much from him tonight either.
Speaker 11: We could do that again with the insurance insurance industry
Speaker 11: and say, at least even if I don't have, by
Speaker 11: law the right to say this. I can say, Look,
Speaker 11: you don't want me to go out as governor and
Speaker 11: say that you aren't willing to tell your own customers
Speaker 11: when they can expect to receive their check for their
Speaker 11: burned house, that burn, you know, six months ago.
Speaker 9: This is how we got here.
Speaker 1: Oh, it's time for mister peanut. All right, We're gonna
Speaker 1: take a quick break, and when we return, we'll tell
Speaker 1: you what mister Peanut has to say about California's insurance crisis.
Speaker 1: Right now, we're going through the sound of all the
Speaker 1: candidates running for governor and what their opinions are on
Speaker 1: California's insurance crisis as they explain it. To CBS News
Speaker 1: is Julie Watts.
Speaker 2: And it's time for He won't be on the debate
Speaker 2: stage tonight, but let's hear what he has to say. Anyway,
Speaker 2: recent guest of this show and Tonio Viragosa, pnut.
Speaker 9: This is how we got here.
Speaker 12: Until just recently, we didn't do catastrophic modeling in this state.
Speaker 12: Every other state in the country did catastrophic modeling because
Speaker 12: we're living in a world of climate change, you know, from.
Speaker 1: Florida already, I feel this answer is getting expensive me too.
Speaker 9: You know, from Florida, it's hurricanes. Here, it's fires.
Speaker 2: Two used to be earthquakes, but nobody even talks about
Speaker 2: earthquakes in this state anymore.
Speaker 1: It's been a while since we've had a big one,
Speaker 1: and I hope we just didn't chink. So us knock
Speaker 1: on wood right now? Okay, hang on? Oh wait, no,
Speaker 1: that's tile two.
Speaker 9: We didn't allow reinsurance.
Speaker 13: Every state allowed reinsurance.
Speaker 6: Why allow them to charge for reinsurance? No, to pass
Speaker 6: on the cost of reinsurance to the consumer.
Speaker 9: No, we didn't allow them.
Speaker 1: Someone's confused, I can tell.
Speaker 2: Look, there is a very very real thought to when
Speaker 2: everyone was looking at all of the candidates after Swallwell
Speaker 2: dropped out, it is obvious that even though he has
Speaker 2: a big resume, and even though he is pretty damn
Speaker 2: charming in person, Tony is old.
Speaker 1: And it comes out well, he's saying that he would
Speaker 1: only serve one term. Yeah, that doesn't ever work to reinsure.
Speaker 7: Well, they're all reinsured, but we didn't allow them to
Speaker 7: charge us. So, in other words, I'm not paying for
Speaker 7: state farms reassurance.
Speaker 2: Yes, and Ricardo Laura has decided that we should pay
Speaker 2: for that cost as well, because if you want to
Speaker 2: know what the house of cards really is here, insurance
Speaker 2: companies have insurance.
Speaker 13: Three three.
Speaker 1: It takes We just had a Jerry Brown moment, a
Speaker 1: couple of them.
Speaker 9: It take poor guy across the country.
Speaker 2: The average got to show you the draw of power
Speaker 2: for these people is so strong, all of these. You know,
Speaker 2: someone like Antonio Viragosa, he's got money, he could go,
Speaker 2: you know, live on an island somewhere with as many
Speaker 2: reporters from Telemundo as he wants.
Speaker 1: But he wants this. He wants to go back to
Speaker 1: Sacramento in his seventies. I don't know why anyone who
Speaker 1: means would even want this job. To run this basket
Speaker 1: case of a state.
Speaker 12: Across the country, the average time that it takes to
Speaker 12: raise rates is three months in the state.
Speaker 6: It's more than it was more than a year.
Speaker 2: So so what Tony's saying is that everything that voters
Speaker 2: passed in Prop One O three is bad.
Speaker 1: Consumer Watchdog's not gonna like that.
Speaker 9: We brought us to some of this.
Speaker 13: Now we have Prop one oh three, and so we
Speaker 13: have an opportunity to obviously, you know, review rate hikes
Speaker 13: to make sure they're not price gouging, and I will
Speaker 13: never support price gouging. But when the entire market leads
Speaker 13: because of those three issues, and disproportionately by the way,
Speaker 13: then you know you have a problem.
Speaker 9: And we should have seen this coming.
Speaker 1: So Tony's answer is, yes, you should all be paying
Speaker 1: a hell of a lot more. Here's what's so weird
Speaker 1: about his campaign. His campaign is half a loaf on
Speaker 1: every subject. It is clearly what's going on in Sacramento
Speaker 1: right now isn't working. Climate change, climate change, climate change,
Speaker 1: We need to incorporate that into the pricing. I don't
Speaker 1: know who you make happy with that. It's like what
Speaker 1: he did with Prop thirty six, and he said crime
Speaker 1: is a problem. What the legislature wants to do doesn't
Speaker 1: go far enough. Prop thirty six goes too far. Well,
Speaker 1: what does that mean?
Speaker 4: You know two things can be true at once.
Speaker 2: Oh it's time for the other recent guest of this show.
Speaker 2: Oh god, what's the opposite of a bump.
Speaker 1: A slump?
Speaker 2: Yes, Tony Thurman and Tony V both appeared on this
Speaker 2: show and then went down in the balls.
Speaker 1: Correlation does not equal causation. I just thought i'd pointed out.
Speaker 4: You know two things can be true at once. The
Speaker 4: insurance industry has to pay more. They've earned so much
Speaker 4: money off of Californias, and then to pick up and
Speaker 4: leave in our moment of greatest need is unacceptable, and
Speaker 4: I will hold them to account and with more regulation
Speaker 4: and more pressure at the same time.
Speaker 5: We need.
Speaker 2: No one wants to even get on the bully pulpit
Speaker 2: and call out State Farm, which I find to be
Speaker 2: really strange.
Speaker 1: Yeah, why is it. They're willing to go after big tobacco,
Speaker 1: they're willing to go after big oil, but for whatever reason,
Speaker 1: State Farm ho if you talk to any of the
Speaker 1: fire victims, is one of the worst actors there. They're
Speaker 1: not willing to go after them by name.
Speaker 4: At the same time, we need to learn to build differently.
Speaker 4: Wildfire is part of our new normal in the state
Speaker 4: of California, and we have to build with materials that
Speaker 4: will keep our homes safer. We have to build in
Speaker 4: places that are less.
Speaker 1: There is a theory I wonder if the insurance companies
Speaker 1: are the ones bankrolling all the environmentalist groups. Oh, that's
Speaker 1: definitely possible. And so if you go after State Farm,
Speaker 1: you're going after filling the blank and viro group and
Speaker 1: they don't want any heat with them.
Speaker 4: Keep our homes safer, we have to build in places
Speaker 4: that are less likely to be impacted by fire or
Speaker 4: by flood. We have to have enough you know, natural
Speaker 4: burns to address areas that could.
Speaker 1: How is Tony Thurman sounding the most common sense on this?
Speaker 1: He's been in state politics for a long time, unlike
Speaker 1: many of the top polling candidates who come from Washington.
Speaker 4: D C.
Speaker 1: Or the private sector.
Speaker 4: Could trigger fire. We have to do all the things
Speaker 4: that we know to keep our community safe.
Speaker 6: Why haven't we done that thus far?
Speaker 7: I mean, it's wonderful to say we need to do
Speaker 7: these things, but how do you tangibly do that if
Speaker 7: we haven't been able to do thus far?
Speaker 4: Well, I think the urgency is certainly upon us, and
Speaker 4: we know that we have to do it. We have
Speaker 4: to educate homebuilders.
Speaker 2: And what he can't say is a good portion of
Speaker 2: the majority bipartisan, the good portion of the legislature bipartisan
Speaker 2: is bought and paid for by the insurance industry.
Speaker 1: He can't say that, No, we have to educate.
Speaker 2: Remember how Ricardo Laura said he wouldn't take any insurance
Speaker 2: company money when he was running for insurance commissioner and
Speaker 2: then took insurance company money.
Speaker 1: He also takes money from the environmentalists too. I think
Speaker 1: there's something there.
Speaker 4: We have to educate homebuilders and educate homeowners' perspective, homeowners
Speaker 4: to not put themselves in situations that will keep them unsafe.
Speaker 4: And it's incumbent on us to do all the prevention
Speaker 4: that we can because we don't have enough people, power,
Speaker 4: and resources to keep up with all of the disasters
Speaker 4: that can affect us. And so again, I see it
Speaker 4: as holding the insurance industry accountable in this state, California.
Speaker 2: What does it say when the lowest polling candidate in
Speaker 2: this piece has maybe the best answer.
Speaker 1: It says, we're screwed.