State Assembly bill would set insurance standards
Nevada County residents struggling to find and afford quality homeowner’s insurance could see greater coverage options if a bill introduced last week in the state Assembly becomes law.
Board of Supervisors chairwoman Heidi Hall joined Insurance Commissioner Ricardo Lara and state representatives on Feb. 18 in backing Assembly Bill 2367, which would create statewide fire-hardening standards for homes and communities, and would require insurance companies to offer coverage to homeowners who meet those standards.
“The growing number of people who cannot find affordable insurance is hurting our communities,” Hall said during a press conference. “We have families who have lived here for generations. Today they are being pushed out by the lack of insurance. This is a problem all across California and it’s not going to get better by itself.”
The bill would create a wildfire resilience task force, including the insurance commissioner, the director of the state Office of Emergency Services and the state fire marshal, which in consultation with the Department of Forestry and Fire Protection and the Office of Planning and Research would determine minimum fire-hardening standards for dwellings and communities to be eligible.
Insurers at a minimum would have to offer the residential property insurance coverage they most commonly offer or sell to homeowners who meet the new standards and have an estimated replacement cost that is consistent with that insurer’s underwriting guidelines. The bill would not apply to homes built after the law was enacted.
According to Lara, the California Department of Insurance has seen a 600% increase in complaints related to non-renewals in areas with increased wildfire risk since 2010.
“If you have a fire-hardened home in a fire-hardened community, you should be able to get insurance and keep it,” Lara said in a press release. “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.”
The lack of insurance options on the voluntary market has forced many Nevada County residents to look to the state’s insurer of last resort, the FAIR plan, which provides limited coverage options and generally higher rates.
Just from 2017 to 2018 the number of Nevada County residents whose insurer initiated a policy non-renewal jumped from 776 to 1,071, while the number of new FAIR plan policies increased from 176 to 235.
The bill’s passage would also allow the insurance commissioner to create incentives for wildfire mitigation efforts and exceptions for insurers that determine they have an over-concentration of risk in a specific region.
The bill may be heard in Assembly committees next month, before going to a second and third reading and, if passed, on to the state Senate.
To contact Staff Writer John Orona, email email@example.com or call 530-477-4299.
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