What happened: The Los Angeles wildfires have prompted discussions in Congress about expanding the National Flood Insurance Program to cover other disasters, shifting the financial burden to taxpayers across the nation.

California’s crisis: California’s insurance market is struggling due to years of suppressed rates, poor wildfire management and rising insurer liabilities.

Florida’s success: Florida tackled its insurance crisis with tort reforms that reduced litigation abuse, stabilized the market and attracted new insurers.

Worth noting: The 1945 McCarran-Ferguson Act grants states authority over insurance regulation, a system that has worked for over 80 years. 

• Federalizing insurance places the burden of state-level mismanagement on taxpayers nationwide.

TLR Thoughts: California’s insurance failures show the consequences of mismanagement, while Florida’s reforms highlight the benefits of state-level solutions. TLR supports maintaining state authority over insurance regulation and encourages policies, but that has to be coupled with a lawsuit environment that does not reward plaintiff lawyers for pursuing meritless lawsuits that cost all Texans money through increased costs for goods and services.

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