A subcommittee of the U.S. House of Representatives will hold a hearing on Thursday on how regulatory policy impacts the prevention of natural disasters, with a focus on the deadly wildfires that ravaged Southern California last month.
The GOP-led House Judiciary Subcommittee on the Administrative State, Regulatory Reform and Antitrust will kick off the hearing, titled “California Fires and the Consequences of Overregulation,” at 10 a.m. on Thursday.
Not only will the hearing examine how regulatory policy in the Golden State has affected the prevention of natural disasters, specifically wildfires, it will also address how “excessive regulation” on insurance and permitting slows down recovery.
Days after the fires began, California Gov. Gavin Newsom suspended regulations related to rebuilding, waiving permitting requirements based on the California Coastal Act and the California Environmental Quality Act to allow for a quicker rebuilding process.
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Firefighters work from a deck as the Palisades Fire burns a beachfront property in Malibu, California, Jan. 8, 2025. (AP Photo/Etienne Laurent)
In the wake of the fires, a March 2024 announcement from California’s largest private insurer, State Farm, stating that it was discontinuing coverage for 72,000 home and apartment policies resurfaced, generating backlash and questions surrounding the accessibility of insurance in that area specifically.
The insurer said a letter sent to the California Department of Insurance (CDI) shortly after that announcement was an “alarm signaling the grave need for rapid and transformational action.”
Now, State Farm is asking the CDI to “immediately approve” a 22% rate increase for non-tenant homeowners, a 15% increase for renters and condo owners, and 38% for rental dwellings.
Smoke from the Palisades Fire rises over residences in Mandeville Canyon Saturday, Jan. 11, 2025, in Los Angeles. (AP Photo/Jae C. Hong)
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The increased rates are to help “avert a dire situation,” State Farm said, and would go into effect on May 1, 2025.
“As of February 1st, State Farm General (Fire only) has received more than 8,700 claims and has already paid more than $1 billion to customers,” the insurer wrote in a release on its website. “State Farm General will ultimately pay out significantly more, as collectively these fires will be the costliest disasters in the history of State Farm General.”
An aerial photo shows multiple charred homes after the Eaton Fire in Altadena, California, on Jan. 30, 2025. (AP Photo/Jae C. Hong)
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The hearing comes a day after Newsom traveled to Washington, D.C., to meet with President Donald Trump and Congressional members in efforts to secure more federal funding for wildfire recovery.
The Secretary of the California Natural Resources Agency, Wade Crowfoot, who oversees water and fire policy across the state, also attended the meeting.
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Witnesses at the hearing include Steve Hilton, founder of Golden Together; Steven Greenhut, R Street Institute resident senior fellow and western region director; and Edward Ring, who oversees Water and Energy Policy at the California Policy Center.
Fox Business’ Rachel Wolf contributed to this report.
