California Commissioner Wants Discounts from Insurers in New Wildfires Framework

California Insurance Commissioner Ricardo Lara on Wednesday submitted an insurance pricing regulation to the California Office of Administrative Law to recognize and reward wildfire safety and mitigation efforts made by homeowners and businesses.

The regulation is said by Lara’s office to be the first in the nation requiring insurer discounts for consumers under the Safer from Wildfires framework created by the California Department of Insurance in partnership with state emergency preparedness agencies.

The Office of Administrative Law has 30 working days to determine whether the proposed regulation satisfies the requirements of the state’s Administrative Procedure Act. Once approved, the regulation text will be filed with the California Secretary of State and become state law.

“My groundbreaking regulation will help more Californians find insurance they can afford,” Lara said in a statement. “It aligns insurance discounts with fire safety actions being expedited by our state emergency leaders and local governments. And, most importantly, it will save lives by helping California become safer from wildfires.”

The regulation incorporates “Safer from Wildfires,” a new framework of wildfire safety measures created in January by a partnership between the CDI and the emergency preparedness agencies in Gov. Gavin Newsom’s Administration, including the California Department of Forestry and Fire Protection, the Governor’s Office of Emergency Services, the Governor’s Office of Planning and Research and the California Public Utilities Commission.

Once approved, the regulation will require all insurance companies to submit new rates that recognize the benefit of safety measures such as upgraded roofs and windows, defensible space, and community-wide programs such as Firewise USA and the Fire Risk Reduction Community designation developed by the state’s Board of Forestry and Fire Protection, which currently includes the counties of Los Angeles, Santa Barbara, and Butte as well as cities and local districts.

The StrongerCA Coalition, a group of insurers including the American Property Casualty Insurers Association, issued the following statement on behalf of Mark Sektnan, APCIA vice president, in response to Lara’s regulation.

“The Insurance Commissioner’s regulations will send a strong signal to consumers and businesses to better prepare for extreme wildfires, but more needs to be done to manage the increasing climate-induced wildfire risk in California while also protecting the accessibility and affordability of insurance. Not only does mitigation protect homes and properties, but ongoing supply-chain delays and inflation put additional strain on homeowners recovering and rebuilding after a wildfire, so preventing fire damage is even more critical.”

Topics California Catastrophe Natural Disasters Carriers Wildfire