Assemblywoman Lorena Gonzalez (D-San Diego), Assemblywoman Monique Limón (D-Santa Barbara), Insurance Commissioner Ricardo Lara, and United Policyholders on Tuesday introduced legislation to give insurance companies a greater role in protecting communities from devastating wildfires. Renew California (AB 2367) would require insurance companies to write or renew policies for existing homes in communities that meet a new statewide standard for fire-hardening. The bill also would authorize the Insurance Commissioner to require insurance companies to offer financial incentives for homeowners to do the work to make their homes more fire-safe.
 
The bill focuses on insurance companies that have been writing fewer homeowner policies and sharply increasing non-renewals of homes with wildfire risk across the state—a response to several years of devastating wildfires. Lack of insurance has sparked a wildfire “domino effect” that disrupts real estate markets and threatens the property tax base that local communities rely on to fund emergency services and more. Data released by the California Department of Insurance in August 2019 showed that insurance is becoming harder to find for communities across the state, with six counties from the Sierra to San Diego seeing a greater than 10 percent increase in non-renewals in 2018 alone. This data does not account for the full impact of insurance companies’ non-renewal response to the Camp Fire and Woolsey/Hill Fires— catastrophic wildfires that killed 89 people, destroyed 13,000 homes and businesses, and cost more than $11.4 billion in damages—in addition to all fires in 2019.
 
“Homeowners who have done all the right things, hardening their homes and mitigating for fire danger, are still seeing their insurance cancelled or non-renewed,” Assemblywoman Gonzalez said. “We can’t allow insurance companies to continue to drop responsible homeowners from San Diego to the Sierras just because they can. Creating the Wildfire Resilience Task Force will bring certainty to consumer homeowners and bring balance back to our insurance markets.”
 
Under AB 2367, the Insurance Commissioner, the California Governor’s Office of Emergency Services (Cal OES) and the State Fire Marshal will develop statewide standards for home and community hardening, in consultation with the California Department of Forestry and Fire Prevention (CAL FIRE) and the Governor’s Office of Planning and Research. Hardened homes in communities that meet this standard would receive a guaranteed offer or renewal of insurance, contributing to community resilience while ending the cycle of lost home sales, falling prices, and declining property values negatively impacting communities across the state.
 
“More Californians are hardening their homes against wildfires but not seeing the results of their hard work when it comes time to obtain or renew insurance,” said Commissioner Lara. “If you have a fire-hardened home in a fire-hardened community, you should be able to get insurance and keep it. We need insurance companies to renew their commitment to wildfire safety with incentives that will allow Californians to lower risk while stopping the domino effect of unstable real estate markets and a declining local tax base for vital services.”
 
This law would apply only to existing homes, whose owners are facing an abrupt change in insurance availability related to wildfire risk. Risk reduction benefits homeowners, insurance companies, local governments, and the state by avoiding or reducing the losses of future wildfires.
 
More legislators are calling for action to preserve insurance access and, last year, Governor Gavin Newsom said that “we must do more” to address non-renewals in his signing message for AB 1816 (Daly), a bill that Commissioner Lara supported that increased an insurance company’s non-renewal notice requirement to a policyholder from 45 to 70 days. In December, Commissioner Lara implemented a new law, which he authored as a member of the California State Senate in 2018, currently protecting more than 1 million households near recent wildfires from non-renewal due to wildfire risk for one year.
 
“There is no easy path forward, but by working together we can lower risk and preserve and protect communities that have been in place for generations,” said Lara. “We have to renew California.”
 
AB 2367 has support from the California Professional Firefighters, California State Firefighters’ Association, Consumer Attorneys of California and the Consumer Federation of California.