California wants to lower the cost of fire insurance for homeowners

FILE - A burning car sits in front of a Wakefield Avenue home that was destroyed by the Mill Fire on Saturday, Sept.  3, 2022, in Weed, Calif.  The lumber company said on Wednesday, Sep.  7, 2022 that it is investigating whether a fire that killed two people while sweeping a northern California town was caused by a failure of the ash-water cooling system at its mill.  (AP Photo/Noah Berger, File)

FILE – A burning car sits in front of a Wakefield Avenue home that was destroyed by the Mill Fire on Saturday, Sept. 3, 2022, in Weed, Calif. The lumber company said on Wednesday, Sep. 7, 2022 that it is investigating whether a fire that killed two people while sweeping a northern California town was caused by a failure of the ash-water cooling system at its mill. (AP Photo/Noah Berger, File)

AP

California moved Wednesday to become the first state to lower insurance costs for property owners who manage to reduce the risk of wildfires, the state’s insurance chief said, as wildfires resumed in the heat-affected region.

But pending legislation still allows insurers to drop homeowners’ insurance if they deem the property too dangerous, the consumer advocacy group said.

Insurance Commissioner Ricardo Lara said the law is the first in the country to require insurance companies to offer home and commercial discounts to customers who subscribe to the new insurance plan announced in February. It includes having a fireproof roof, at least 5 feet (1.5 meters) of protected space around the house and removing overgrown vegetation.

Additional mitigation may be required if the property is in an area that has taken steps to reduce wildfire risk.

They submitted the final rules to the California Office of Administrative Law, which has 30 business days to ensure that Lara complies with regulatory requirements before they take effect.

Lara said in a statement that the new laws will “help more Californians find insurance they can afford” and “save lives by helping keep California safe from wildfires.”

The pending legislation also requires insurance companies to provide consumers with a “risk assessment” of their property and provide them with a way to appeal claims or portions of insurance coverage. The California Association of Realtors said it has long pushed for fire hazard notices to be part of the law.

“Homeowners deserve to be rewarded for their hard work,” said Anna Buck, who works with the association.

American Property Casualty Insurance Association Vice President Mark Sektnan said the legislation “sends a strong signal” to property owners to better prepare for wildfires, “but there is much more that needs to be done to address California’s climate-induced fire risk and protect availability.” . and the availability of insurance.”

Seren Taylor, executive director of the Personal Insurance Federation of California, said the discount “must be based on data that links cost savings to actual risk reduction.” He said the state should also allow insurers to “use advanced technology to accurately track California’s weather risks, rather than relying on existing laws that require insurers to look back at past events.”

The state’s fire department says the reclamation and rezoning of private properties will add $300 million to the state’s fire preparedness budget.

The advocacy group Consumer Watchdog supported the proposed legislation but said it would go too far.

These laws give insurers a “substantial recourse.” “It will allow insurance companies to avoid discounts by simply saying the property is too dangerous and to refuse to sell policies to homeowners at any price.”

Deputy Insurance Commissioner Michael Soller called the criticism “unacceptable.”

“People will be safer, and we hope to see more insurance companies writing policies as a result,” he said.

This article was originally published September 7, 2022 6:50 PM.