Nonprofit agencies caring for some of Central Valley’s most vulnerable youth are caught in a difficult bind. Last year, California’s largest insurer for nonprofit foster care agencies announced it would leave the market and stop renewing policies. This forced agencies to either find much more expensive insurance or halt foster care placements.
One longtime provider, Sierra Vista Child & Family Services in Modesto, found the cost too high. In November, the organization—operating since 1972—shut down its foster care placement services. However, other programs, including a short-term therapeutic foster program, continue as usual.
About 20 foster youth were affected by the shutdown, but their cases were quickly transferred to other foster family agencies in the area. Sierra Vista’s CEO, Andrew Timbie, said all children stayed with their current foster families, helping to ease the transition.
Still, the insurance crisis is putting many foster care agencies across California at risk. Timbie explained, “When the insurer pulled out, it was the final straw. It wasn’t the only reason, but it became the decision we couldn’t work around.”
In California, foster youth are served either by county agencies or licensed nonprofit foster family agencies that recruit and supervise foster parents. Until last year, about 90% of the state’s 220 foster family agencies were insured by the Nonprofits Insurance Alliance of California (NIAC).
Recent changes in state law expanded legal protections for survivors of sexual abuse, allowing lawsuits beyond previous time limits. These changes increased the risk of costly claims against foster family agencies.
NIAC said a $25 million award in a 2023 Sonoma County abuse case was the tipping point for its exit. The ruling found an agency insured by NIAC liable for 60% of the damages, while the abuser and his wife were responsible for the rest.
Damien Zillas, NIAC’s senior corporate counsel, said, “We are not seeing more claims, but the value of claims is rising.” NIAC had tried to pass new laws to limit these claims but failed, leading to its withdrawal.
California has around 40,000 foster youth, with about 9,000 placed in foster family agencies. In Stanislaus County alone, there were about 440 foster youth last year, with 57% placed through foster family agencies, according to Jeff Davis, associate director of Stanislaus County Community Services.
Though other agencies absorbed Sierra Vista’s closure, continuing to provide foster care remains a major challenge. Davis voiced concerns, saying, “If a solution doesn’t come, I don’t know if foster family agencies can afford these high costs. Losing homes makes it harder to care for kids.”
Related topics：
