{"id":424452,"date":"2024-05-01T05:33:00","date_gmt":"2024-05-01T12:33:00","guid":{"rendered":"https:\/\/calmatters.org\/?p=424452"},"modified":"2024-06-03T12:04:29","modified_gmt":"2024-06-03T19:04:29","slug":"california-insurance-mitigation","status":"publish","type":"post","link":"https:\/\/calmatters.org\/_zh\/economy\/2024\/05\/california-insurance-mitigation\/","title":{"rendered":"\u52a0\u5dde\u6c11\u4f17\u6b63\u5728\u9632\u8303\u5c71\u706b\u3002\u4e3a\u4f55\u4ecd\u5b58\u5728\u4fdd\u9669\u5371\u673a\uff1f"},"content":{"rendered":"
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\u603b\u4e4b<\/strong><\/p>\n\t\t\t\t\n\n\t\t\t\t\n\t\t\t\t

Lawmakers want mitigation measures to be tracked, updated and accounted for to help insurance availability and affordability.\n<\/p>\n\t\t\t\t\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\n\t\t\n

\u8fd9\u4e2a\u6545\u4e8b \u4e2d\u6587<\/a><\/em><\/p>\n\n\n\n

Spend any time thinking or talking about insurance in California these days and you\u2019re bound to hear the word \u201cmitigation.\u201d <\/p>\n\n\n\n

Fire officials, lawmakers, insurance agents and others are asking homeowners  to help lower the risk of devastating wildfires by making improvements to their properties \u2014 in some cases at great expense \u2014 and often in the context of trying to hang on to their insurance policies. The state has spent about $3.7 billion on forest management in the past seven years. Communities, fire districts and others are doing their part, too.<\/p>\n\n\n\n

But some insurance companies citing growing risks and costs have paused or stopped writing new policies in California, causing a crisis of home-insurance affordability and availability. Some homeowners have seen their premiums spike<\/a> or are being priced out, while others have been forced to turn to the ever-growing FAIR Plan<\/a>, the insurer of last resort that offers less coverage but higher insurance premiums anyway.<\/p>\n\n\n\n

As Insurance Commissioner Ricardo Lara rolls out his plan<\/a> to try to reverse that trend, three state lawmakers are pushing for mitigation to be taken into account when insurers set premiums or when they decide whether to offer policies at all. Or they want mitigation to be more effectively tracked and strategized.<\/p>\n\n\n\n

\u201cWe believe that if you do the homework, you should get the credit,\u201d said state Sen. Josh Becker, the Democrat representing Menlo Park. \u201cAs a state, we\u2019re doing that homework.\u201d<\/p>\n\n\n\n

Becker\u2019s staff cites the billions of dollars the state has spent on reducing fuel and managing vegetation since 2017, when wildfires consumed many parts of California. The sum doesn\u2019t include other spending on fire engines, air tankers and increasing staff for Cal Fire, which has added about 4,500 positions in the past decade.<\/p>\n\n\n\n

A bill authored by Becker seeks to incorporate mitigation into insurance companies\u2019 underwriting decisions \u2014 when they consider whether to write or renew policies. Senate Bill 1060<\/a> awaits a hearing in the Senate Appropriations Committee.<\/p>\n\n\n\n

One of the regulations Lara has unveiled as part of his plan to try to fix the state\u2019s insurance market involves allowing insurers to use catastrophe models in rate-making, which includes taking mitigation into account. But some say that\u2019s not enough to address the availability of insurance.<\/p>\n\n\n\n

Former state Insurance Commissioner Dave Jones recently told CalMatters that Becker\u2019s bill is needed specifically for underwriting because the insurance commissioner\u2019s authority is limited to rate-making.<\/p>\n\n\n\n

\u201cLocal, state and federal governments are spending billions of dollars in forest treatments, so homeowners ought to see a benefit,\u201d Jones said. \u201cThat\u2019s not happening now, but should happen.\u201d<\/p>\n\n\n\n

Wildfire mitigation and risk<\/strong><\/h3>\n\n\n\n

Studies show that mitigation is reducing wildfire risks. A recent study by the National Association of Insurance Commissioners<\/a> found that structural modifications can reduce wildfire risk by 40%, and, when combined with vegetation modifications, can reduce risk by 75%. A subsequent Moody\u2019s study found that utility Southern California Edison\u2019s actions to harden its power grid reduced the risk of catastrophic wildfire losses<\/a> by 75% to 80%.  <\/p>\n\n\n\n

But insurance-industry experts have concerns about Becker\u2019s bill. For one thing, they say incorporating mitigation into underwriting shifts more financial risk to insurers.<\/p>\n\n\n\n

In addition, they say they already use models that account for mitigation. <\/p>\n\n\n\n

Sheri Lee Scott, an actuary for a Milliman Property & Casualty practice in Orange County, said the bill is yet another regulation that could \u201cexacerbate\u201d the insurance crisis. <\/p>\n\n\n\n

\u201cInsurance companies are trying their best to incorporate (mitigation) already,\u201d Scott said, pointing to a recent state regulation directing insurers to incorporate mitigation into determining premiums \u2014 which Scott wrote in a report \u201cpresents tremendous challenges for insurers in terms of compliance and the potential erosion of adequate rates for wildfire risk.\u201d<\/p>\n\n\n\n

The insurance commissioner said his office started enforcing that rule on considering mitigation last year<\/a>, but homeowners, insurance agents, fire chiefs and other lawmakers say the different ways everyone is trying to reduce wildfire risk isn\u2019t making enough of a dent in the state\u2019s insurance crisis.<\/p>\n\n\n\n

Bernard Molloy, fire chief of Murrieta, said during a public workshop hosted by the Insurance Department last week that \u201cresidents don\u2019t receive credit\u201d for the \u201ctremendous amount of work\u201d they put into trying to reduce wildfire risk. Jorge Escobar, a Bay Area resident, said during the same workshop that he had just asked the Moraga fire district whether insurance companies are taking mitigation into account. \u201cThe answer was, surprisingly, no\u2026 Why isn\u2019t this being mandated?\u201d he asked.<\/p>\n\n\n\n

Tina Purwin, an insurance agent in Northridge, told CalMatters her clients get notices that they\u2019re not being renewed despite taking action to avoid wildfire risk. <\/p>\n\n\n\n

\"\"
Donna Yutzy’s home in the Magalia area of Butte County on Nov. 4, 2023. State regulations related to insurance carriers giving credit to property owners for mitigation discourage the use of landscaping plants and any flammable materials within a five-foot radius of the house. Photo by Manuel Orbegozo for CalMatters<\/figcaption><\/figure>\n\n\n\n

\u201cCarriers are being ultra picky,\u201d Purwin said. \u201cThey\u2019re looking for any way to not take the risks.\u201d<\/p>\n\n\n\n

At another public hearing on insurance issues last week \u2014 by the Little Hoover Commission, the independent state oversight agency \u2014 Nevada County Supervisor Heidi Hall said the Sierra Nevada-area residents she represents are spending \u201ctens of thousands of dollars\u201d on hardening their homes, and that the \u201ccounty itself has put in millions of dollars, with the help of Cal Fire, to put in fire breaks.\u201d<\/p>\n\n\n\n

Yet, she said \u201cwe\u2019re not seeing discounts from insurance companies. They\u2019re still leaving.\u201d<\/p>\n\n\n\n

Assemblymember Freddie Rodriguez, a Democrat representing Chino, authored another bill related to mitigation. Assembly Bill 2983<\/a> calls for the Insurance Department and the California Office of Emergency Services to work together on figuring out whether investments in mitigation are helping insurance availability.<\/p>\n\n\n\n

Project assessments would have to be published on state websites. And a representative of the Insurance Department would be added to the board of the California Wildfire Mitigation Program. <\/p>\n\n\n\n

\u201cSome people think (mitigation is already taken into account), some don\u2019t,\u201d Rodriguez said. \u201cWe need to bring everyone together. We need to talk about it.\u201d<\/p>\n\n\n\n

Rodriguez\u2019s staff said both the Insurance Department and the mitigation program appear to be open to the board-representative idea. The Insurance Department did not answer questions and the emergency services agency did not respond to questions in time for publication.<\/p>\n\n\n\n

Earlier this month, the Assembly Insurance Committee approved AB 2983 and re-referred it to the Assembly Appropriations Committee.<\/p>\n\n\n\n

\u2018They should not be losing their insurance\u2019<\/strong><\/h3>\n\n\n\n

Another bill would require the Insurance Department to evaluate every three years whether to update its Safer from Wildfires<\/a> regulation, which identifies steps property owners and officials can take to protect their homes and communities. The steps include installing fire-rated roofs, upgrading windows, removing combustible sheds and more. The department adopted the regulation in 2022 and says on its website that taking these measures \u201ccan help you save money on your insurance.\u201d<\/p>\n\n\n\n

Assemblymember Damon Connolly, a Democrat representing San Rafael, authored AB 2416<\/a>,  which he said would \u201clock in periodic updates to the program so it\u2019s most effectively serving consumers.\u201d<\/p>\n\n\n\n

Connolly said his staff is in talks with the Insurance Department, which he said is open to discussing his bill. He also said he has made amendments to address insurance-industry concerns. The Insurance Department did not answer questions about the bill. <\/p>\n\n\n\n

The assemblymember also said that not only should property owners get discounts when they take the steps outlined in the regulation, \u201cI would say if consumers are doing these steps, they should not be losing their insurance.\u201d<\/p>\n\n\n\n

The Assembly Insurance Committee has referred his bill to the Assembly Appropriations Committee.<\/p>\n\n\n

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Josh Becker<\/p>\n

Democrat, State Senate, District 13 (Menlo Park)<\/p>\n <\/a>\n \n \n

\u8fbe\u8499\u00b7\u5eb7\u8bfa\u5229<\/p>\n

Democrat, State Assembly, District 12 (San Rafael)<\/p>\n <\/a>\n \n \n

Freddie Rodriguez<\/p>\n

Democrat, Former State Assembly, District 53 (Chino)<\/p>\n <\/a>\n <\/div>\n\n<\/div>\n\n\n\n

Lawmakers representing California in Congress are trying to make mitigation measures matter, too. U.S. Rep. Mike Thompson, the Democrat who represents Napa and other counties, said during a press conference last week in Santa Rosa that his bill, HR 7849<\/a>, would establish a program for individual homeowners in certain areas to receive grants of up to $10,000, as well as tax credits for homeowners and businesses, for mitigation. <\/p>\n\n\n\n

The legislation, co-authored by U.S. Rep. Doug LaMalfa, the Republican who represents rural Northern California, was introduced in March and referred to the House Ways and Means Committee and the Transportation and Infrastructure Committee.<\/p>\n\n\n\n

Thompson said that as he and his colleagues tried to figure out how they could help on a national level, \u201cwhat we heard repeatedly from insurance companies was: Make sure there\u2019s disaster resilience in building, that homeowners (are doing) everything necessary to protect their homes.\u201d<\/p>\n\n\n\t\n\t\t

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\n\t\t\t\t\tCalifornia insurance crisis<\/span>\n\t\t\t\t<\/h2>\n\t\t\t\t\t\t\n\t
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California insurance market \u2018in chaos,\u2019 says former insurance chief. Can this chief fix it?<\/a><\/h3>\t\t\t\t\t\t\t\t\t\t
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350,000 Californians are now on the FAIR Plan, the last resort for fire insurance. Now what?<\/a><\/h3>\t\t\t\t\t\t\t\t\t\t
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