California legislator wanted to guarantee home insurance. Companies fought back

Stephen Hobbs, The Sacramento BeeSacramento Bee

Insurance companies on Wednesday beat back the latest effort to force them to sell homeowner policies to Californians who take certain steps to make their properties less likely to burn, over the urging of wildfire victims and efforts to make a proposed bill more agreeable to the influential businesses.

The measure, Senate Bill 1076, would have created a pilot program to identify areas of the state where residents would be guaranteed coverage if they met certain wildfire mitigation goals both as individuals and also as a larger community.

It was seen as a way to help give certainty to those rebuilding after last year’s Los Angeles-area fires, and other disasters, that they will be able to secure coverage if they pay for expensive efforts to make their new homes less likely to go up in flames.

“If we want Californians to build back safer, we must also ensure they have a pathway to stay insured,” its author, state Sen. Sasha Renée Pérez, D-Alhambra, said of the bill before it died in the Senate Insurance Committee.

The proposal originally would have required companies to cover the homes of individuals who take specific steps to make their homes more fireproof, an idea that advocates and legislators have pitched for years.

Companies have adamantly opposed efforts to do so, arguing that work on individual homes here or there does not substantially reduce the risk of a major blaze, and remained against the bill even after Pérez agreed to an array of changes that included calling for the pilot program.

Seren Taylor, a lobbyist for the Personal Insurance Federation of California, an industry trade group, called the measure a “direct threat to insurance solvency” because it would force companies to take on much more risk without requiring that their rates be high enough to prepare for potentially large claims.

State Sen. Steve Padilla, D-Chula Vista, who chairs the committee, chided the businesses for their continued opposition to the amended bill, saying they had emphasized in past conversations that reducing the risk of fires would help them to insure more homes in the state.

“To come in and kill a bill that does exactly what the industry has said is the major dynamic in what causes them to not be able to write policies, I personally find a little offensive,” Padilla said. “And a little disingenuous.”

He had worked with Pérez on the proposed changes.

The new program would have only applied to five communities across the state instead of all of California and the coverage guarantee would have only occurred if specific goals created by a group of insurance, fire and other experts were met.

“This is the first time you have a pilot of this nature ever,” Padilla said. “And it’s imperfect, yes. Is it necessary? Yes!”

Currently, companies provide discounts to homeowners who take steps to add more fire-resistant roofs and windows and clear vegetation from around their houses, along with other actions. But those savings can sometimes be small compared with the cost of making the changes.

Carmen Balber, executive director of the advocacy organization Consumer Watchdog, had a positive view of what was a disappointing outcome for the group.

“It was an historic day that the Legislature actually finally debated whether or not people should get insurance coverage if they do what they’re supposed to and make their homes fire safe,” she said. Previous proposals had not even received a hearing.

The ideas included in the measure could still appear in another bill later this year.