There is something that can be done that will help all Californians through the present insurance crisis. There is an Assembly Bill 3554, which is a start in the right direction. The intent of the bill is to set up a State Liability Insurance Fund for local governments. Initially the fund was to be the exclusive source of insurance for liabilities in excess of $1 million. For reasons unknown, the exclusive feature has been removed.
It should be understood that it is a complete waste of money for any public entity to buy insurance from the commercial insurance companies. Between 30% and 50% of the premium spent over an extended period of time is the cost of running the commercial insurance system over and above the losses paid. A government-operated pool should be able to perform the same function for 5% or less.
A state-run pool starting in excess of a minimum $25,000 deductible, which could be increased for larger entities, should take care of the problem. The pool manager would set rates and premiums based on past experience and risk exposure. The entities should be encouraged to form their own pools when possible. These pools could then buy their excess insurance from the state pool. Any entities that did not want to or could not join the smaller pools could insure directly with the state pool.