California to require insurance discounts for property owners who reduce wildfire risk
The California legislature recently passed legislation that would exempt private home and business property owners from paying the mandatory insurance premium for property insurance when they reduce wildfire risk.
The bill, SB 14, would also require insurers to treat wildfire risk reduction strategies as a loss category, and allow any covered loss to be reduced by a maximum of 14 percent.
California fire policyholders would no longer be penalized for taking measures to reduce fire risk, and insurers could still refuse to insure risk reduction strategies to which the insured had not applied.
The bill would apply to commercial, residential, and business structures. It was passed with unanimous support Monday by the Senate and Assembly Appropriations Committee.
“This is one of the last pieces of legislation left to make wildfire risk reduction a reality,” said Sen. Scott Wiener of San Francisco, the lead author of the bill. “California has had a decade of bad experiences with wildfires. I firmly believe this legislation will help reduce wildfire losses overall.”
The bill is the result of a three-year collaboration between the California Legislative Fire Caucus, the Santa Monica Fire District, and the Cal Fire Research and Training Institute.
“We are pleased the California Legislature saw the need for these actions,” said Steve Lippman, president of the Cal Fire Research and Training Institute. “Many of our members have expressed an interest in utilizing this program, and these provisions will further enhance the value of their business products and services.”
Under current law, the homeowners insurance company is required to pay for wildfire risk reduction measures that reduce property damage in the event of a wildfire, if the reduction reduces the total hazard by 14 percent. A typical measure that reduces the hazard for a property is to install a sprinkler system.
The insurance company can then decide if it will pay out on the insurance claim, or decline to make the payment because the homeowner never applied for
