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February 18 2025                                                                                       (916) 553-4093

SB 222 is a Catastrophic Blow to California’s Economy That Won’t Fix the Insurance Crisis

SACRAMENTO, CA – The business community is raising urgent concerns over SB 222, warning that the bill will devastate California’s economy while doing nothing to fix the state’s growing insurance crisis.

A comprehensive economic impact analysis of SB 222 conducted by the Center for Jobs and the Economy reveals that the legislation will unleash billions in litigation costs, force businesses to shut down, and drive insurance premiums higher for all Californians—without meaningfully addressing climate risks or stabilizing the insurance market.

According to the economic analysis, SB 222 would allow unlimited litigation based on loosely defined "climate damages," opening the floodgates to damage claims ranging from $124 billion to $307 billion in 2026 alone, with cumulative claims reaching up to $1.1 trillion over five years (2026-2030).

“SB 222 is a nightmare for California’s economy and our cost-of-living crisis,” said Rob Lapsley, president of the California Business Roundtable. “It will cost consumers billions, kill jobs, and raise energy prices—without doing anything to protect homeowners or businesses from insurance losses. Trial attorneys and their cover group, Consumer Watchdog, already broke California’s insurance market with Proposition 103; this will turn an insurance crisis into a statewide economic crisis.

“California policies have already caused sky-high energy prices, a cost-of-living crisis, and businesses to leave the state. SB 222 will make everything worse. Most importantly, it does nothing to fix the state’s broken insurance system, ensure homeowners have access to the private insurance market, and reduce wildfire risk,” Lapsley continued.

The report identified significant impacts to the cost-of-living crisis in California, including: 

• Households could face an annual financial burden of $6,200 due to rising prices.
• Housing costs could increase by $1,161 per year for homeowners and $1,692 for renters.
• Gasoline prices expected to rise 63%, reaching $7.38 per gallon.
• Electricity rates could increase by 31% for residential consumers and 55% for industrial users.

“We need to have serious discussions about how we solve the immediate insurance crisis and SB 222 is a dangerous and expensive wase of the Legislature’s time. Californians can’t afford SB 222 or the excuse it gives policymakers to do nothing to stop the next catastrophic fire and insurance market fallout,” Lapsley concluded.
 

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