California to require insurance discounts for property owners who reduce wildfire risk
California, where homes are valued at about a third their value, is facing a serious wildfire risk as climate change accelerates, according to a study. (Photo by JOSHUA TRUJILLO/AFP/Getty Images)
By David Shepardson
It often takes a major disaster for California to start focusing on the ways in which it can save taxpayers money.
But when the firestorm of October 2017 arrived, it triggered an unprecedented series of events that led the state to act swiftly and dramatically.
Shortly after the flames spread from a wildfire in Malibu to at least 10 other locales across the state, Gov. Jerry Brown and the state legislature acted swiftly, enacting a series of laws designed to cut costs by providing homeowners with cost-effective insurance discounts.
Within days, California enacted an ambitious plan, requiring homeowners to purchase fire insurance that they could afford, and then required the California Department of Insurance to issue homeownership or rent-to-own insurance that would cover properties in an affordable way. To pay for the discounts, the state proposed taxing real property as real property, rather than personal property. The state paid $1 billion to fund the project that resulted in a bill that now heads to the legislature’s June 17 deadline.
The governor and lawmakers were quick to respond to the fire emergency, because it put pressure on both the administration and the legislature to act. And California’s plan for wildfire safety was so well-regarded that it was quickly adopted by the nation’s leading insurance companies.
The plan was more comprehensive than most, but the state was able to quickly take action because of the strong political support it received. And the new plan has already shown dividends for many homeowners and owners of properties that were not damaged by the fire. Since the state’s program went into effect on Jan. 1, the number of houses insured by the California Life and Disability Insurance Association, the top provider of fire and other casualty insurance in the state, has increased from 3.3 million to 3.7 million.
Over time, the state is likely to come through its rebuilding phase with far lower cost structures than were destroyed, said Bruce Benson, a risk management specialist with the California Fire Retardancy
