In a significant step toward climate resilience, California Insurance Commissioner Ricardo Lara is backing new legislation designed to protect underserved communities from the escalating impacts of climate-related disasters. Assembly Bill 1236, the Local Climate Insurance Pilot Projects Act, proposes a proactive approach by funding innovative insurance projects that close protection gaps and bolster disaster recovery for low- and moderate-income Californians.
Innovative Insurance Solutions for a Warming World
AB 1236, authored by Assemblymember Celeste Rodríguez, introduces a grant program administered by the California Department of Insurance. The program’s primary mission is to design and test scalable insurance products, like parametric and community-based insurance, that can help vulnerable communities prepare for, withstand, and recover from climate disasters.
These pilot projects aim to:
- Develop and demonstrate new insurance models such as community-purchased or parametric insurance.
- Pair insurance initiatives with risk-reduction activities like early warning systems and nature-based solutions (e.g., wetlands and urban tree canopies).
- Support regionally-focused projects that build resilience at the community level.
- Promote education on how insurance can serve as a tool for climate preparedness and recovery.
Widespread Support from Industry and Advocacy Groups
The Assembly Insurance Committee has already advanced the bill with strong support from a diverse coalition that includes environmental organizations, insurance industry leaders, social justice advocates, academic institutions, and local governments. Among the backers are The Nature Conservancy, the Environmental Defense Fund, UC Santa Cruz, and the American Property Casualty Insurance Association.
Michael Jarred of The Nature Conservancy noted that “nature-based solutions can significantly reduce disaster risk,” which in turn can make insurance more accessible and affordable. These insights align with the recommendations from the 2021 Climate Insurance Report, developed by the Climate Insurance Working Group established under Senate Bill 30, also championed by Commissioner Lara.
Building a Blueprint for the Future
AB 1236 is more than a legislative proposal—it’s a strategic vision for the future of climate risk management in California. It emphasizes:
- Proof-of-concept projects that expand insurance coverage.
- Integration of ecological resilience and insurance affordability.
- Results will be tracked long-term, with mandated reporting to the legislature beginning in 2029 and every three years thereafter through 2035.
Commissioner Lara states, “It’s time for California to align with the rest of the world, which has been developing innovative climate insurance solutions to protect our most vulnerable populations for years now.”
Next Steps
The bill has now been moved to the Assembly Appropriations Committee for consideration. If passed, AB 1236 could become a landmark initiative, making California a national leader in marrying insurance innovation with climate adaptation.
For communities facing increasing threats from wildfires, floods, and extreme heat, this legislation offers more than just insurance—it offers hope.
Get the latest insurance market updates and discover exclusive program opportunities at ProgramBusiness.com.