Reducing wildfire risk around home should help with fire insurance rates

Wildfire is a risk all Hill homeowners and residents must live with and accept. Living in the San Jacinto Mountains means knowing that there is a chance our home, our valuables, our keepsakes and possessions may be lost to a fire.

Fire insurance is often available, not to protect us from the wildfire threat, but rather to try to mitigate the damage and soften the pain after the damage occurs.

Nevertheless, proximity to wildfire danger can affect the availability or cost of this insurance which we need.

And the California Department of Insurance, which oversees insurance companies and rates, has taken steps to lessen the possibility of insurance companies abandoning property owners either through direct cancelation or premium increases.

No cancelation due to Fairview Fire

On Sept. 8, Gov. Gavin Newsom issued a Proclamation of State of Emergency for the Fairview Fire. For the areas the proclamation covers, insurance companies are prohibited from canceling fire insurance policies within one year.

The Hill areas that will have a one-year protection from fire insurance cancelations include Pine Cove, Idyllwild, Mountain Center and Garner Valley. A list of ZIP codes for which this applies may be found at www.insurance.ca.gov/01-consumers/140-catastrophes/MandatoryOneYearMoratoriumNonRenewals.cfm. California Insurance Bulletin 2022-13 identifies Hill ZIP codes 92549 and 92561 as included in the area affected by the September Fairview Fire.

Senate Bill 824, which Insurance Commissioner Ricardo Lara authored, in 2018, prohibits an insurance company "from canceling or refusing to renew a policy of residential property insurance for one year after the declaration of a state of emergency based solely on the fact that the insured structure is located in an area in which a wildfire has occurred, with respect to an insured property located within or adjacent to the fire perimeter, as specified."

Another state regulation requires insurance companies to give policy holders a 75-day notice of intention to cancel a policy. These 75-day notices cannot be issued during the one-year moratorium on cancelation. Therefore, for policies that might have expired or needed renewal during the 12 months, the 75-day notice cannot be issued until the next renewal date, according to the state's insurance website.

Wildfire insurance rates

In October, the state Insurance Department issued regulations to recognize and reward wildfire safety and mitigation efforts homeowners and businesses make. This regulation, "Mitigation in rating plans and wildfire risk models," is the first in the nation requiring insurance companies to provide discounts to consumers under the Safer from Wildfires framework, which the California Department of Insurance (DOI) in partnership with state emergency preparedness agencies created last year.

The regulation requires insurance companies to submit new rate filings incorporating wildfire safety standards the department creat4ed. The new rates must recognize the benefit of safety measures such as upgraded roofs and windows, defensible space and community-wide programs such as Firewise USA and the Fire Risk Reduction Community designation developed by the state's Board of Forestry and Fire Protection.

The new rate filings must also establish a process for releasing wildfire risk determinations to residents and businesses within 180 days, according to the press release from Insurance Commissioner Ricardo Lara.

"Transparency is an important benefit of this regulation, by requiring insurance companies to provide consumers with their property's 'wildfire risk score' and creating a right to appeal that score," he added.

Companies would have to specify what were the reasons that influenced the consumer's score, what the policyholder could do to lower their score and how much their premium might be reduced if they take actions the company recommends.

When setting prices, insurers would have to consider whether a homeowner or commercial property owner have taken steps, such as clearing vegetation or installing fire-resistant vents, that would reduce a property's wildfire risk.

The regulation incorporates the Safer from Wildfires framework, created in February 2022 by a first-ever partnership between the Department of Insurance and the emergency preparedness agencies in Newsom's administration, including the California Department of Forestry and Fire Protection, the Governor's Office of Emergency Services, the Governor's Office of Planning and Research, and the California Public Utilities Commission.

"Home Hardening retrofits, along with Defensible Space significantly increase a home's chance of surviving a wildfire," said Chief Daniel Berlant, Cal Fire deputy director of Community Wildfire Preparedness and Mitigation. "Using the latest fire science and recent wildfire data, these retrofits and landscaping requirements provide a strong path to structure survivability."

The needed actions are listed below the story.

Currently, 18 insurance companies have answered Lara's call to offer discounts demonstrating greater options for consumers. Several companies offer both community-wide discounts (for example, a home in a Firewise or a Shelter-In-Place community) and home-specific discounts (for example, maintaining defensible space or home-safety measures against wind-blown embers). The DOI advises contacting the company directly for how it prices and markets its policies.

View the list of insurance companies currently offering discounts at www.insurance.ca.gov/01-consumers/105-type/95-guides/03-res/Insurers-Currently-Offering-Discounts.cfm.

Bill Magavern, policy director, Coalition for Clean Air, said this about the new regulations: "Coalition for Clean Air agrees with Commissioner Lara that insurers should recognize consumers' wildfire mitigation actions in their rate filings. Rates should provide incentives to harden homes and communities. Those actions will help save lives and homes, and will also reduce toxic smoke that is emitted when buildings burn."