On Thursday, California Insurance Commissioner Dave Jones (Commissioner) issued recommendations and a legislative framework to address the growing problem of availability and affordability of insurance coverage for homeowners living in the wildland-urban interface (WUI) and other high wildfire risk areas of the State. 

The report, which provides a summary of the major issues and provides California Department of Insurance recommendations on how to address the insurance coverage issues in the WUI and other high-risk areas, is in direct response to work done by participants in the California Tree Mortality Task Force, including several RCRC member counties and RCRC staff, aimed at finding solutions to the growing number of cancellations and non-renewals of homeowners insurance policies in high-risk areas, as well as the relative unaffordable nature of those policies that are available.  

In the wake of the disastrous wildfires of October 2017, even more homeowners are now in danger of cancellations and non-renewals as they try to recover from the devastation from last year’s fires.  The report acknowledges the fact that the majority of complaints regarding renewal issues and premium increases since the Butte and Valley fires in 2015 have come from ZIP codes designated by the California Department of Forestry and Fire Protection (CAL FIRE) as high fire risk areas, despite the minority of the state’s population residing in these areas.  The report recommends that the legislature create a framework which will ultimately offer a greater variety of policy options and make available mitigation credits and other programs by which homeowners can reduce the costs of their insurance coverage.

The Commissioner’s report was released the same day as the introduction of Senate Bill 824 (Lara), a bill aimed at tackling some of the same problems addressed in the report.  In addition to leaving an opening for a framework to the one outlined in the Commissioner’s report, SB 824 also prevents insurers from non-renewing policies for homes destroyed as a result of a disaster such a as a wildfire, as well as requiring insurers to obtain the Commissioner’s approval before reducing the number of policies written within a certain geographic area.

The Commissioner’s press release can be accessed here.