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US Representative Adam Schiff, a California Democrat who’s running for the Senate, is vowing to take another shot at reining in soaring home insurance rates that he says are “gouging” his constituents.

To do so, Schiff is casting a spotlight on an obscure corner of the business: reinsurance, an area in which insurers seek to transfer part of their risk to other companies. He says a proposal he first introduced in January — a measure that’s opposed by industry heavyweights — would provide a cheaper alternative.

As California contends with more frequent and severe natural disasters, including this week’s deadly heat and wildfires, Schiff’s attention to insurance underscores the mounting frustration in the state over the rising cost and reduced availability of homeowners’ policies. The trouble goes well beyond California, with property insurers also pulling back on coverage, and in some cases leaving the market, in states such as Florida and Louisiana.

Related: State Farm Seeking Large Rate Increases in Wildfire-Prone California

“There are huge numbers of Californians and people around the country who should be able to buy insurance and yet, because of the way the system has not worked, they’re just unable to buy coverage that’s the least bit affordable,” Schiff said in an interview. “This is something we have to address.”

In January, Schiff introduced the Incorporating National Support for Unprecedented Risks and Emergencies Act, proposing a new federal reinsurance option that he said would be cheaper than private alternatives.

Related: California Wildfire Outlook: ‘A Challenging Season for Firefighters’

The bill would require participating insurers to offer comprehensive coverage for wildfires, storms and floods, among other risks. Schiff said he would model the proposal after the Terrorism Risk Å˽ðÁ«´«Ã½Ó³»­ Act, which was implemented to help insurers recoup losses after the 9/11 attacks.

Industry Resistance

The insurance industry has resisted Schiff’s plan to barge into the reinsurance business with a public option. Jimi Grande, senior vice president of federal and political affairs at the National Association of Mutual Å˽ðÁ«´«Ã½Ó³»­ Companies, warned that the measure would incentivize people to live in high-risk areas.

“You don’t want to create an artificially low premium because what you’re doing is not reflecting the true risk,” Grande said. “Once you create this horrible cycle of encouraging people to move to the most dangerous places, you don’t acknowledge the actual risk of living in those places.”

Schiff acknowledged such concerns but dismissed fears that premiums would be set too low.

“Policies are already reflecting those higher costs,” he said.

Reinsurance companies, which provide relief to insurers when a major disaster strikes, charge premiums that are also becoming more expensive. State Farm last year cited “a challenging reinsurance market” as one of the reasons for its decision to restrict new coverage in California. Allstate also complained of increasing reinsurance costs when it paused new policies in the state.

Schiff said his reinsurance proposal would provide a balm in one part of the market. At the state level, meanwhile, millions of homeowners are relying on pricier insurance or limited plans and regulators are trying to overhaul market rules to bring back insurers.

Even if Schiff finds support for his proposal, it would take years to provide homeowners with any relief. It’s unclear whether the measure has enough support to pass. Even if it did, it wouldn’t go into effect until four years after approval.

Coverage for flood, winds and hurricanes would be prioritized first, and Schiff said the federal reinsurance program could eventually merge with the government’s National Flood Å˽ðÁ«´«Ã½Ó³»­ Program, which carries about $20 billion in debt.

That leaves an uncertain outlook for the proposal. But Schiff signaled the potential for bipartisan support as property insurance keeps getting more expensive.

“There’s nothing partisan about trying to make sure that your constituents can afford insurance,” he said. “A lot of the red states are at the most risk of climate disasters. California is maybe a blue outlier in that scenario. But a lot of deep red states are facing their own insurance catastrophes.”

Top photo: Adam Schiff’s attention to insurance underscores the mounting frustration in California over the rising cost and reduced availability of homeownersÂ’ policies. Photographer: Al Drago/Bloomberg.

Topics California