A California bill could cut home insurance costs. Here’s why companies hate it.

Insurance trade groups aren’t happy.

Senate Bill 1060 would require insurers to take vegetation management, home protection, and other work meant to reduce wildfires into account when determining the risk of covering a property.

Its author, Sen. Josh Becker, said the state is spending billions of dollars to prevent and lessen the effect of fires.

“We want to see that reflected in the way that the industry evaluates risk,” the Menlo Park Democrat said.

In a recent letter, representatives of four insurance trade groups called the proposal “shortsighted and problematic.”

The goal of the bill “is to force insurers to take on risks that are not supported by adequate rate levels and jeopardize their financial solvency,” said the organizations, which include the Personal Insurance Federation of California and the American Property Casualty Insurance Association. They added: Companies use many factors, other than mitigation, when determining coverage and price.

Beyond that, they said it will undermine work by the Department of Insurance.

Currently, the agency is unveiling rule changes in an effort to make coverage more available, particularly for homeowners. One of them is to allow companies to use computer models to assess potential risks when coming up with rates. A public hearing on the plan is scheduled for later this month.

Becker said the groups misunderstand his intentions and that conversations about their concerns are ongoing.

“This doesn’t interfere with any of the other work that’s going on.”

He also pointed to a study by the Nature Conservancy and Willis Towers Watson, a major insurance broker. It said mitigation work, such as prescribed burns and vegetation thinning, leads to decreases in insurance premiums by reducing the frequency and severity of wildfires.

“We think this is a win-win,” Becker said.

If the change goes into effect, and the state’s mitigation work is not reducing risks, Becker said he and other lawmakers should evaluate the Legislature’s spending.

The measure is set to be discussed at a hearing later this month.

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