A series of new regulations will be introduced to Californian insurers due to the current wildfires which are continuing to burn across California.
Insurance Commissioner Ricardo Lara has scheduled an investigatory hearing on Monday, October 19. The hearing will take place in order 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 stabilise the insurance market while protecting lives and homes, reducing catastrophic wildfire losses, and increasing transparency for consumers.
As a regulator for the insurance market, Lara will be taking actions in order to develop home-hardening standards that are consistent and are based on fire science. He will also be giving transparency to consumers about their wildfire risk score and what they can do to reduce it.
Another way in which Lara will be regulating is to make sure insurers use wildfire risk scores to determine which homes they will write and the premium they charge. Rates that insurers charge will also need to be adequate and justifiable in order to protect the solvency of the market.
Lara’s actions come as Department of Insurance data shows that insurance has become less available and affordable for many residents.
Lara commented: “With climate change fuelling 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. 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.”
“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 incentivising 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.”