Ricardo Lara’s political career is likely toast.

It’s because Lara finally acted like a grown-up this week.

As California’s insurance commission, Lara granted State Farm the ability to raise rates on a temporary emergency basis starting June 1.

His action translates into an average hike for State Farm’s California policyholders of:

*17 percent for homeowners.

*15 percent for renters and condo owners.

*38 percent for rental dwellings.

This is on top of any rate increase this year State Farm’s insured were slapped with when their policies were renewed or will be renewed.

If you think this doesn’t impact you because you are a renter or have insurance through another company, guess again.

State Farm is the proverbial canary in the coal mine or, in this case, the bird unable to flee the deadly flames and smoke of California wildfires.

State Farm is dealing with a staggering $7 billion in claims from the Los Angeles wildfires that destroyed or damaged more than 12,000 homes, businesses, schools, and other structures in January.

Lara, knowing full well making such a decision could end his political career, dodged making the final decision on State Farm’s request until he received the opinion of an administrative law judge who reviewed the insurance company’s request for the emergency rate hike.

Karl-Fredric Seligman determined the 38-page application that State Farm submitted was “fundamentally fair, adequate, and necessary measure.”

The administrative law judge characterized it as “a rescue mission to stabilize State Farm’s financial condition while safeguarding policyholders.”

Freely translated, if the request wasn’t granted, the company would unlikely be able to afford to continue underwriting policies anywhere in California.

State Farm isn’t the only insurer taking oversized hits from California’s wildfires. Dealing with the claims from multiple massive wildfires on a yearly basis is starting to threaten the stability of insurers.

It’s a situation only made worse by Lara, who up until last year, wouldn’t allow rate increases based on a current year’s losses.

Instead, rates had to be justified using a five-year average of claim payouts.

At the same time, Lara in December allowed insurers to spread their increasing risks from wildfires across all Californians and not just to those living in high risk wildfire zones.

The result has been rate increases this year between 15 and 20 percent for many who are not in high risk wildfire areas.

You rent, you say. So no big deal, right?

Wrong.

The State Farm application underscores a hard truth: The proper insurance coverage for contents and replacing the rental structure can be just as costly, if not more so, as insurance for homeowners in terms of being just as proportionate.

It’s because the cost of insuring a structure is ultimately collapsed into monthly rents.

Why the insurance cost hit tends to be less proportionately for renters is the fact many renters forgo personal property and content losses for themselves.

They are not covered against such losses in the polices issued to owners of rental properties.

Why that is important Californians need to understand this is the direct results from decades of:

*bureaucratic roadblocks slowing down the ability to reduce fire fuels by holding up needed permits for controlled burns and such.

*failure by state regulators to effectively oversee maintenance and operational aspects of for-profit utilities that lead to in increased odds of starting wildfires.

*allowing the California Environmental Quality Act to be used as a weapon to combat urban area growth and forcing the development of “affordable” housing in the state’s lower-cost wild land interface areas.

*indulging oblivious or reckless individuals that build homes in extremely high fire risk locations.

Lara’s decision in December to spread the pain to prevent insurance firms from pulling out of the dicey California insurance growth is the direct result of the aforementioned.

It also has a lot to do with artificial manipulation of rates by the state from decades of Sacramento politicians engaging in can kicking when it comes to a host of concerns that create increased wildfire risks and higher housing costs.

Politicians have — and likely will continue to do so — put the blame 100 percent on climate change, manmade or otherwise, and the “big bad insurance companies.”

Building homes in flood plains, urbanizing wildfire areas and such are not due to greenhouse emissions. It’s the direct result of land use zoning and policies put in place following the dictates of Sacramento.

As for the insurance companies, they do not have a printing press to churn out money like the federal government.

Their losses can’t continue to outpace income.

And if they don’t make a reasonable profit along the way, there is no reason why they should risk underwriting insurance in any state that artificially manipulates rates.

Insurance commissioners need to stay in their lane and let the market do its job.

That means keeping an eye out for any collusion and price fixing among insurers and acting quickly upon its discovery.

It doesn’t mean forcing insurers to sell policies at a loss when weighed against claim payouts.

That is what California has done to a large degree.

It is why now that the accumulative impact of the missteps and sins of Sacramento leaders are all converging, we are enjoying everything from energy price hikes to insurance price hikes that are significantly higher than if they had been addressed sooner.

It is too late to close the proverbial barn door, if you will.

We can, however, avoid a repeat of government overreach and government inaction.

It will require us not going ballistic if politicians don’t pander to our tendency to demand that nothing cost more while at the same time giving us more.

Also, we need to understand there are either consequences or tradeoffs to actions we take as individuals.

If we opt to build a home on a windswept hill covered two thirds of the year by dry vegetation ranging from trees and shrubs to trees, it is going to cost us more to insure against wildfire than someone living in Manteca.

Thanks to Lara, however, even though wildfire risk is significantly lower in Manteca and other locales, his December decision to spread such risk to all Californians means you will be subsidizing lifestyle decisions of those affluent enough to enjoy stunning views from atop wind swept hills.

This column is the opinion of editor, Dennis Wyatt, and does not necessarily represent the opinions of The Bulletin or 209 Multimedia. He can be reached at [email protected]