CA Insurance Commissioner Takes Action to Protect Consumers, Stabilize Insurance Market following Wildfires

With devastating fires continuing to burn across California, Insurance Commissioner Ricardo Lara will convene an investigatory hearing on Monday, October 19 to initiate a series of regulatory actions that will protect residents from the increasing risk of wildfires. Several years of deadly and destructive wildfires, intensified by climate change, have made insurance more difficult and expensive to find for many Californians, especially those living in high wildfire risk areas and in the "wildland urban interface" of the state. The Commissioner’s actions aim to help stabilize the insurance market while protecting lives and homes, reducing catastrophic wildfire losses, and increasing transparency for consumers.

Source: Sierra Sun Times/CA Insurance Dept. | Published on September 18, 2020

wildfires and smoke

With climate change fueling California’s devastating fires, I am taking action to bring down the risk of losing your home in a wildfire and losing your insurance to a non-renewal. Californians need to know they can get and keep insurance they can afford before they buy, sell, or build a home," said Commissioner Lara. "I will use my authority under California law and Proposition 103 to protect consumers and the future of a sustainable insurance market in our state."

Commissioner Lara will take the following actions as regulator of the nation’s largest insurance market:

  • Developing home-hardening standards that are consistent, based in fire science, and apply to all insurance companies;
  • Giving transparency to consumers about their wildfire risk score and what they can do to reduce it. Insurance companies use wildfire risk scores to determine which homes they will write and the premium they charge;
  • Creating insurance incentives recognizing home hardening, mitigation of properties, and community mitigation actions; and,
  • Requiring that insurance companies seek adequate and justifiable rates to protect the solvency of the market.

Commissioner Lara’s actions come as Department of Insurance data shows that insurance has become less available and affordable for many residents. Over the past year, Commissioner Lara met with thousands of residents, first responders, and local leaders in more than 22 counties from the Sierra and foothills, the Central Coast, and Southern California and in virtual meetings since March of this year.

"Our current reality of increasing insurance premiums and non-renewals hurts those who can least afford it, including working families and retirees on fixed incomes," said Commissioner Lara. "We can lower the insurance risk by incentivizing people to bring down the fire risk on their properties and in their communities with clear, science-based home-hardening standards. I call on insurance companies to work together with policyholders to renew California."

The investigatory hearing, which will be virtual due to the COVID-19 pandemic, will be held on Monday, October 19 and Commissioner Lara invites consumers, first responders, insurance representatives, and others affected by insurance availability and affordability to participate.

 

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