California will soon require insurers to increase home coverage in wildfire-prone areas

SACRAMENTO, Calif. (AP) — Hundreds of thousands of California homeowners who have failed to find or lost access to home insurance as wildfires in the state become more destructive will once again be able to buy policies under a state regulation announced Monday.

The rule will require home insurers that write policies in the state to offer coverage in high-risk areas, something the state has never done, Insurance Commissioner Ricardo Lara's office said in a statement. Insurers will have to start increasing their coverage by 5% every two years until they hit the equivalent of 85% of their market share. That means if an insurer writes 20 out of every 100 state policies, they'd need to write 17 in a high-risk area, Lara's office said.

The requirement will take effect within 30 days.

Major insurers like State Farm and Allstate have said they would stop writing new policies in California due to fears of massive losses from wildfires and other natural disasters.

“Californians deserve a reliable insurance market that doesn’t retreat from communities most vulnerable to wildfires and climate change,” Lara said in a statement. “This is a historic moment for California.”

In exchange for increasing coverage, insurers will be able to consider climate change when setting their prices under a different rule taking effect this week. They're all parts of an effort to persuade insurers to continue doing business in the nation’s most populous state.

Wildfires have always been part of life in California, where it only rains for a few months out of the year. But as the climate has gotten hotter and dryer, it has made those fires much larger and more intense. Of the top 20 most destructive wildfires in state history, 14 have occurred since 2015, according to the California Department of Forestry and Fire Protection.