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California Bill Would Force Insurers to Cover “Hardened Homes”

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Californians facing the uncertainty of being denied homeowners insurance would get relief under a new bill proposed in Sacramento if they fire-hardened their homes.

Lawmakers want to require admitted insurance companies to cover all existing dwellings as long as they meet new fire-hardening safety standards.

The bill, AB 2367, would also require insurers to offer financial incentives for homeowners to fire harden their homes.

New “fire-hardening” standards will be set by a state panel including the state fire marshal.

“Homeowners who have done all the right things, hardening their homes and mitigating for fire danger, are still seeing their insurance canceled or non-renewed,” state Assemblywoman Lorena Gonzalez (D-San Diego), co-author of the bill, told the LA Times. “We can’t allow insurance companies to continue to drop responsible homeowners from San Diego to the Sierras just because they can.”

California insurance commissioner Ricardo Lara backs the bill as concerns grow of a wildfire “domino effect,” driving down home prices and shrinking property taxes that support essential services.

The bill comes after several years of destructive wildfires that have caused insurers to flee from high-risk fire zones. Last August, the California Department of Insurance released data finding eight counties across the state experienced a 10% increase or more in policy non-renewals.

The American Property Casualty Insurance Association, the largest trade group representing insurers, and the Personal Insurance Federation of California, issued the a statement about the proposed legislation that said in part:

“We look forward to working together on solutions that best address homeowners’ concerns about non-renewals, but we need to avoid legislation that limits consumers’ choices or results in unintended consequences that harm Californians. While a relatively low percentage of Californians face non-renewal in high-risk areas, it is little comfort to those who can’t find insurance.”

The statement also notes that claims payments from two consecutive years of massive wildfires have left California homeowners insurers with an underwriting loss of over $10 billion.

You can follow the status of the Assembly Bill here.

Creating a defensible space and hardening your home does not have to cost a lot. Click here to learn more about home hardening tips from Cal Fire.