California becomes the first US state to enforce wildfire insurance discounts

New rules require insurers to issue wildfire risk scores to consumers' properties

California becomes the first US state to enforce wildfire insurance discounts

Catastrophe & Flood

By Lyle Adriano

California’s insurance regulator has implemented new rules that now require insurers to assess the wildfire risk of their customers’ properties and provide insurance discounts to those with safer properties.

"Protecting Californians from deadly wildfires means everyone doing their part, including insurance companies by rewarding consumers for being safer from wildfires," said California Insurance Commissioner Ricardo Lara. "The reality of climate change is driving my determination to help communities better prepare, help our firefighters save lives, and help more Californians find insurance they can afford. My department will work diligently to increase discounts to reward the hard work that California consumers do to protect their families, homes, businesses, and communities.”

The California Department of Insurance (CDI) issued rules that require insurers to submit new rate filings incorporating wildfire safety standards created by the department. The rules also require insurance companies to create a process for publishing wildfire risk determinations for both residents and businesses within the next 180 days. Property owners will also be given the right to appeal the assessments.

“My regulation is the result of listening closely to the needs of consumers and businesses and crafting common-sense, lasting solutions that strengthen our ability to protect Californians from the threat of climate change-intensified wildfires,” said Lara in a statement.

In partnership with California Governor Gavin Newsom, the CDI last week also released “Safer From Wildfires” guidelines, which list steps that homeowners and business owners can take to receive the discounts. Steps include fitting properties with Class A fire-rated roofs, clearing vegetation and flammable debris from surrounding areas, and establishing a community evacuation plan.

Bloomberg reported that a government website has been created, containing contact information for insurers operating in California that already offer discounts to customers for mitigating their fire risk. These insurers include State Farm and Allstate.

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