Stacy A. Korsgaden

This is the second installment in our series on fixing California’s insurance system. The first outlined the five pillars that once supported a thriving market. Today, we focus on the most maligned and misunderstood pillar of all: Insurance Companies.

Insurance companies don’t owe the state of California anything. They are private businesses, not public utilities. Their purpose is to assess risk, offer protection, and make a profit. That’s not something to apologize for. It’s something to defend.

Profit is not a dirty word. It’s the backbone of innovation, solvency, and service. It’s what allows companies to pay claims, weather disasters, and compete for your business. But instead of encouraging success, Sacramento punishes it by imposing price caps, restricting risk assessments, and dictating what products insurers are allowed to offer.

This isn’t consumer protection. It’s economic central planning with a friendly face.

California’s political class has decided that risk should be socialized until the money runs out. They demand that private companies operate like charities while refusing to address the true drivers of loss: wildfire mismanagement, legal abuse, and anti-growth policies.

Here’s a radical idea for the bureaucrats: let businesses manage their own risk.

If you build in a fire zone, if you refuse to harden your property, if you want coverage for every possible inconvenience, that’s your choice. But don’t demand that the state force insurers to subsidize it. That’s not fairness. That’s theft through regulation.

Real competition, not command-and-control mandates, creates better coverage, lower prices, and stronger companies. If insurers can compete freely, they’ll serve customers better because they have to. That’s how markets work. That’s how freedom works.

California doesn’t have an insurance problem. It has a government problem. A control problem. A values problem.

It’s time to get government out of the business of business and let insurance companies do what they do best: serve, compete, and survive.

That’s how we rebuild the first pillar: by getting out of the way.