In recent years, California has been increasingly ravaged by wildfires. Twelve of the 20 worst fires in California’s history have happened since 2017. In 2020, the worst year on record for wildfires, some 4.3 million acres in California burned.
The environmental crisis looms large throughout the state.
According to the Los Angeles Times, a fire hazard map recently produced by the California Department of Forestry and Fire Protection illustrates the deepening of the crisis. For rural and unincorporated areas, fully 55% of the 31 million acres accounted for by the study are deemed high risk, up from 48% in 2007.
As consumers and businesses try to navigate the new normal, they have been confronted by soaring insurance premiums on the one hand, and reduced payouts — even policy cancellations– on the other.
California fights back
Fire science and wildfire data show that aggressive mitigation efforts, like home hardening retrofits and compliance with defensible space requirements can substantially reduce the fire hazard risk that homes, businesses and communities bear.
To incentivize mitigation and address out-of-control insurance costs, Insurance Commissioner Ricardo Lara has called for insurance pricing regulation, the first of its kind in the nation, tying these mitigation efforts to insurance company rating plans. Insurance companies must recognize reduced risks and provide discounts accordingly.
The new insurance regulation also calls for transparency. Consumers must be provided with the risk score assigned to their property, and they’ll have the right to appeal it.
California is an evolving landscape, environmentally and in terms of community adaptation and financial policy. While progress is being made on all fronts, individuals and businesses might need legal assistance to resolve insurance disputes that will continue to occur.