New Mexico Governor Wants State Run Homeowners Insurance

New Mexico Governor Michelle Lujan Grisham wants to set up a state-run homeowners insurance department to write fire-only insurance. Her push hasn’t gotten very far in the New Mexico Legislature so Lujan Grisham is asking for a commission to study the idea.

In her state-of-the-state address last week, Lujan Grisham said New Mexico is facing a fire insurance crisis because of the wildfires that have devastated the state. She told the Legislature because of the fires insurers are fleeing high-risk areas.

“Fires spurred by climate change have also ravaged communities in our state, testing our patience and resilience as we struggle under the weight of natural disasters in our backyards,” Lujan Grisham said. “As if the fires themselves aren’t difficult enough, getting insurance protection is becoming impossible, either because it’s simply no longer available or exorbitantly expensive.”

She wants the state-sponsored insurer to be separate from New Mexico’s FAIR Plan, and says it will be similar to the state’s workers’ compensation system that offers coverage outside of the private market.

However, without legislative interest or backing, the administration has chosen to shift toward conducting a study instead.

The Legislature, meanwhile, is looking more at helping with mitigation efforts. Senate Bill 33 — the Wildfire Prepared Act — pushes mitigation. Bill sponsor, Senator Harlan Vincent said it will make communities safer and he hopes insurance prices will drop because of those efforts.

“You’re going to see a lot of the insurance prices go down and insurance companies are going to want to insure your home because they know they’re safe,” Vincent said. “But, right now, it’s just so unpredictable because our forests are so thick.”

If passed, the bill will take $20 million from the general fund and has bipartisan support.

Source link: Insurance Business America — https://bit.ly/41RnPAt