Nearly 10,000 children in California’s foster care system are at risk of losing their homes over insurance. There are about 45,000 kids total in California’s foster system and more than 1 in 5 of them live in group homes supported by nonprofit foster family agencies, or FFAs. Most often, FFAs care for children considered high-risk, like older kids or those who are medically fragile or have unique needs.
Since there are plenty of liability risks associated with housing so many kids, FFAs must have insurance coverage.
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That insurance coverage comes mostly from one source. The Nonprofits Insurance Alliance of California (NIAC) said it covers about 90% of California’s FFAs, but warns it’ll be forced to drop them if changes aren’t made. That means California’s FFAs could start losing coverage as early as next month.
State officials say that could lead to a crisis. Without the ability to find safe families for children in the system, thousands of kids potentially would have nowhere to go.
NIAC said the main issue for insurers is the rising cost of sexual abuse claims. It’s no secret there are widespread reports of children being abused in America’s foster situations.
But because of that and the legal liability that falls on FFAs, insurance companies say they can no longer cover agencies that recruit, certify, and support foster parents. Without that coverage, FFAs will no longer be able to oversee those parents.
While the nonprofits could try to find new insurers, many have left the market in California. County governments could also take over homes currently run by foster family agencies, but that’s a process that could take months.
In 2020, California passed a law extending the statute of limitations for adults to sue for sexual abuse they suffered as children, resulting in a wave of lawsuits. The Nonprofits Insurance Alliance said foster family agencies often end up paying the price because of contract clauses requiring them to take legal responsibility.
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In the most recent state legislative session, the alliance sponsored a bill that would have made it harder for victims to sue foster family agencies. However, most of the bill was scrapped after several advocacy groups argued it stepped on victims’ rights.
For now, it remains to be seen if a resolution will be found before insurers start letting FFAs’ coverage lapse on Oct. 1.
SIMONE DEL ROSARIO: NEARLY 10-THOUSAND CHILDREN IN CALIFORNIA’S FOSTER CARE SYSTEM ARE AT RISK OF LOSING THEIR HOMES – OVER INSURANCE.
THERE ARE ABOUT 45-THOUSAND KIDS IN CALIFORNIA’S FOSTER CARE SYSTEM AND MORE THAN ONE IN FIVE OF THEM LIVE IN GROUP HOMES SUPPORTED BY NONPROFIT FOSTER FAMILY AGENCIES – OR F-F-As.
MOST OFTEN, F-F-As CARE FOR CHILDREN CONSIDERED HIGH-RISK – LIKE OLDER KIDS OR THOSE WHO ARE MEDICALLY FRAGILE OR HAVE UNIQUE NEEDS.
SINCE THERE ARE PLENTY OF LIABILITY RISKS ASSOCIATED WITH HOUSING SO MANY KIDS – F-F-As *MUST* HAVE INSURANCE COVERAGE.
AND THAT INSURANCE COVERAGE COMES MOSTLY FROM ONE SOURCE. THE NONPROFITS INSURANCE ALLIANCE SAYS THEY INSURE 90% OF THESE GROUP HOMES, BUT NOW THEY WARN THEY’LL BE FORCED TO DROP THEM IF CHANGES AREN’T MADE.
CALIFORNIA’S GROUP HOMES COULD START LOSING COVERAGE AS EARLY AS NEXT MONTH.
STATE OFFICIALS SAY THAT COULD LEAD TO A CRISIS. WITHOUT THE ABILITY TO FIND SAFE FAMILIES FOR CHILDREN IN THE SYSTEM… THERE ARE THOUSANDS OF KIDS WHO POTENTIALLY WOULD HAVE NOWHERE TO GO.
THE PRIMARY INSURER, NIAC, SAYS THE MAIN ISSUE IS THE RISING COST OF SEXUAL ABUSE CLAIMS.
IT’S NO SECRET THERE ARE WIDESPREAD REPORTS OF CHILDREN BEING ABUSED IN FOSTER HOMES.
THE STATE RELIES ON F-F-As TO RECRUIT, TRAIN AND CERTIFY PARENTS TO EXPAND THE NUMBER OF HOMES AVAILABLE. BUT INSURANCE COMPANIES SAY F-F-As ARE BEARING TOO MUCH LEGAL BLAME WHEN THINGS GO WRONG, AND THAT MAKES THEM UNINSURABLE.
WHILE THE NONPROFITS COULD TRY TO FIND NEW INSURERS… MANY HAVE LEFT THE CALIFORNIA MARKET.
COUNTY GOVERNMENTS COULD ALSO TAKE OVER HOMES CURRENTLY RUN BY FOSTER FAMILY AGENCIES… BUT THAT’S A PROCESS THAT COULD TAKE *MONTHS*.
IN 20-20 CALIFORNIA PASSED A LAW EXTENDING THE STATUTE OF LIMITATIONS FOR ADULTS TO SUE FOR SEXUAL ABUSE THEY SUFFERED AS CHILDREN… RESULTING IN A WAVE OF LAWSUITS.
NONPROFITS INSURANCE ALLIANCE SAYS FOSTER FAMILY AGENCIES OFTEN END UP PAYING THE PRICE – BECAUSE OF CONTRACT CLAUSES REQUIRING THEM TO TAKE LEGAL RESPONSIBILITY.
IN THE MOST RECENT STATE LEGISLATIVE SESSION – THE ALLIANCE SPONSORED A BILL THAT WOULD HAVE MADE IT HARDER FOR VICTIMS TO SUE FOSTER FAMILY AGENCIES.
HOWEVER, MOST OF THE BILL WAS SCRAPPED AFTER SEVERAL ADVOCACY GROUPS ARGUED IT STEPPED ON VICTIMS’ RIGHTS.
NIAC SAYS THEY WILL NOT RENEW INSURANCE UNLESS LEGAL RESPONSIBILITY SHIFTS…WHICH GIVES THE STATE UNTIL OCTOBER FIRST TO FIND A SOLUTION.
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