Calif. bill would require insurers to cover homes in wildfire zones

A new bill in California would force insurance companies to keep insuring homeowners that live in wildfire zones. AB 2367 would mandate that starting in 2021, insurers would have to renew policies and continue to write new policies in communities that meet fire standards for firescaping or home hardening.

The bill would create a new Wildfire Resilience Task Force that would include the Insurance Commissioner, the Director of the Office of Emergency Services, and the State Fire Marshal, or designees of those individuals, who would jointly come up with the fire standards mentioned above.

The commissioner would have the authority to regulate and implement exceptions to the standards.

Bill outlines requirements for insurers

Under the bill, an admitted insurer who sells residential property insurance would be required to offer or sell the existing property insurance it most often sells to an applicant who owns a residence with an estimated cost that is consistent with the insurer’s underwriting guidelines, meets minimum standards established by the task force, and was built before the standards were established.

Current law regulates the classes of insurance, including residential fire and property insurance, and defines the measure of indemnity for a loss under a personal property policy. The existing law also requires a person who controls a building or structure in, upon, or next to a wildfire-prone area to maintain 100 feet of defensible space around the structure, among other things.

The purpose of this bill is to make sure individuals that live in districts that have been affected by fires in the past can get reasonably priced insurance. Lately, several communities have experienced unprecedented non-renewal rates, despite working towards reducing the risks.

See also:

• Underwriting wildfire risk requires a more strategic approach
• Wildfire event response: How P&C insurers can help fix it
• P&C Legislative Round-Up: March 2020