California’s insurance crisis now includes the foster care system.
The main provider of foster care agencies is dropping its insurance coverage for the nonprofits, causing some to close.
For two decades, Robin and Mark Malloy have opened their Elk Grove home to 39 foster children.
The Malloys rely on a lot of help, including wrap-around resources provided by a foster family agency, or FFA.
“They are the liaison, so it’s like we tell them what this kid is asking for and they’re on it,” said Robin Malloy.
Mark Malloy agreed. “If there’s an issue we’re having, they provide the necessary resources to assist,” he said.
FFAs are private, nonprofit organizations that recruit and support foster families.
There are about 200 in the state.
The California Department of Social Services reports that as of May 31, 13 FFAs have closed, which served 148 foster youth.
So far, the agency said no child placements have been disrupted by the closures.
Chris Stoner-Mertz of the California Alliance of Child Family Services said those children ultimately become the responsibility of the county.
“And many of these counties are struggling,” Stoner-Mertz said.
Foster family agencies are struggling to afford new, more expensive insurance policies, resulting from high payouts in civil lawsuits.
Stoner-Mertz compared the sexual abuse claims and settlements to the wildfires and loss of homeowners’ insurance.
“It’s almost like it’s a cascading effect rather than an immediate in-your-face crisis that people can see and feel, which makes it in some ways harder to get the attention we need on it,” she said.
Koinonia Family Services in Loomis serves 600 foster families throughout the state.
Thirty insurance companies denied their request for policies.
“Everyone was feeling this is a huge risk. This market is a huge risk now,” said Tiffany Sickler, a former executive director.
For decades, Koinonia used the Nonprofit Insurance Alliance of California.
Right now, NIAC is not renewing policies.
“The thing about this crisis, though, is that it’s wholly preventable. And that’s frustrating,” said NIAC founder Pamela Davis.
Davis said it’s a result of rulings like this:
Foster parent Mark Martinez was convicted of sexual abuse in Sonoma County, resulting in a nearly $16 million civil jury award for three young siblings.
“That foster family agency shouldn’t be held accountable for that random criminal act that no one could have foreseen,” Davis said.
She’s fighting for legislation that doesn’t remove liability but does protect FFAs if they do their due diligence, as she said NIAC did in this case.
“There should be perhaps other recovery, like a victims of crime fund, but not the foster family agency that has not done any wrong,” she said.
Sickler at Koinonia didn’t give up and has pieced together her insurance needs with different carriers, keeping her 600 FFAs operating.
We ultimately did get approved for new insurance, but our premium went from somewhere in the $300,000 range to almost $1 million a year,” Sickler said. “That’s a huge gap to fill for sure.”
The California Alliance of Child Family Services asked the State Legislature for help.
It recently received $31.5 million from the state to cover the insurance costs.
But advocates said that’s just a temporary fix. They want a permanent solution.
“Ensuring that foster children continue to get what they need and that they are not put at risk or they do not have their day in court, but that we also can protect the organizations that are working to serve them,” Stoner-Mertz said.
Foster parents like the Malloys said they hope a solution comes quickly so they can continue to help the children who need it most.
“I feel like at some point the kids will fall through the cracks because they need a village,” said Robin Malloy.
Madison Voss, the senior deputy press secretary for California Insurance Commissioner Ricardo Lara said he’s been partnering with the Governor’s Administration and the California Department of Social Services (CDSS) to convene meetings with key stakeholders since last fall to explore ways to help FFAs get more insurance coverage, as well as consider short-term solutions to meet immediate needs.
Commissioner Lara issued a Notice on August 23, 2024, to all property and casualty insurance companies strongly encouraging them to expand their coverage to FFAs and offering our assistance streamlining the process for admitted insurers interested in entering the market and/or increasing coverage in this area,” Voss said in a statement. “We continue to work with insurers interested in expanding into this market and encourage greater participation in this space.”
See more coverage of top California stories here | Download our app | Subscribe to our morning newsletter | Find us on YouTube here and subscribe to our channel
TOP STORIES FROM KCRA:
Deputies investigate shooting at gas station in Arden-Arcade area
More drones for illegal fireworks enforcement results in $330,000 in fines, Elk Grove officials say
California AG Rob Bonta says action is coming against online fantasy sports platforms
Fans celebrate Ozzy Osbourne at Northern California Ozzfests and a book signing | Archive
‘We’re not leaving California’: In-N-Out says HQ isn’t changing with owner’s move to Tennessee
READ THE FULL STORY:From wildfires to foster care: California insurance crisis expands to agencies helping at-risk youth
CHECK OUT KCRA:Stay informed. Get the latest Modesto, Stockton and Sacramento news and weather from the KCRA news team.
