California aims to reduce fire insurance costs for homeowners

SACRAMENTO, Calif. (AP) — California on Wednesday decided to become the first state to lower insurance costs for homeowners who make improvements to reduce their risk of fire, the state’s insurance commissioner said then. as wildfires erupt again in the heat-stricken state.

But pending regulations still allow insurers to drop homeowners insurance altogether if they deem the site too risky, a consumer advocacy group has said.

Insurance Commissioner Ricardo Lara said the regulations are the first in the country requiring insurance companies to provide premium discounts on residential and commercial coverage to customers who follow the new insurance standards announced in February. They include a fire-resistant roof, at least 5 feet (1.5 meters) of defensible space around a house, and the elimination of overgrowth.

Further reductions would be required if the property is in a community that has taken steps to reduce wildfire risk.

He submitted the final rules to the California Office of Administrative Law, which has 30 business days to ensure that Lara has complied with the proper administrative procedures before they go into effect.

Lara said in a statement that the new regulations will “help more Californians find insurance they can afford” and “save lives by helping California protect itself from wildfires.”

Ongoing regulations also require insurance companies to provide consumers with the “risk score” of their property and provide them with a means of appealing that score or the classification assigned by the insurer. The California Association of Realtors said it has long called for the disclosure of fire risk scores and welcomed this part of the settlement.

“The owners deserve to be rewarded for their efforts,” association lobbyist Anna Buck said in a statement.

The American Property Insurance Association did not respond to repeated requests for comment.

The state fire agency said renovation and landscaping requirements for individual properties will increase the $300 million the state is spending to prepare communities for wildfires.

Advocacy group Consumer Watchdog supported the pending regulations, but said they did not go far enough.

The regulations give insurers “a huge escape clause”, the group said. “It will allow insurance companies to circumvent discounts simply by claiming a property is too risky and refusing to sell a policy to the owner at any cost.”

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