Newsom unveils new homeowner's insurance plan

Consumer watchdog groups say insurance will become even more expensive in California, under a plan unveiled by Gov. Gavin Newsom. 

Newsom said the state needs to let insurance companies raise rates more quickly, otherwise more of them will leave the state.

The governor's  proposed changes apply to all types of insurance for homeowners, businesses and anyone who owns a car or a boat.

He sent a bill on Wednesday to state lawmakers that would allow insurance companies to raise their rates more quickly and with less time for public review.

Newsom said this will cut out red tape and make it easier for insurance companies to do business here.

But consumer advocacy groups say it's just going to make it easier for companies to increase their prices.

Under the governor's plan, state insurance officials would have just 60 days to review and approve any proposed rate hikes from insurance companies.

Right now, the process can take up to two years.

Consumer watchdog groups also warn there's nothing in the proposal to guarantee insurers provide more coverage and start offering new policies again.

The watchdog groups also argue it removes oversight and will make it easier for insurance companies to hike their prices.

"That will make it harder for the public to protest and challenge improper rates and practices," Harvey Rosenfeld, Consumer Watchdog founder, said Thursday. "People who want our elected leaders to do the job need to contact their local legislators and say enough is enough."

For months, insurance companies have been leaving California homeowners in the dark.

State Farm recently announced it would not be renewing more than 72,000 policies in the state.

The city of Orinda topped the list of cities in the state with more than 1,700 homeowners not having their state farm policy renewed this year.

Karl Susman, an industry analyst, said he's optimistic the charge will bring insurance carriers back.  

"It doesn't change their ability to do anything differently," Susman said. "It just changes the amount of time it will take for them to get a response from the Department of Insurance."

More than 30 years ago, California voters passed Prop. 13, which sets limits on the amount insurance rates could go up,

The governor's office says his plan doesn't change that part of Prop. 13. But it does shorten the amount of time the state will now have, to study the impact of those proposed price increases.

Consumer advocacy groups say it will end up making all types of insurance more expensive for everyone: Homeowners, businesses and car insurance.

The governor wants state lawmakers to add his insurance plan to the overall state budget bill.

The state budget must be approved by June 15.