Pruning trees, removing weeds: These are some of the steps many California property owners have taken to protect their homes and businesses from wildfire.
Insurers who write policies in areas deemed “high risk” for wildfires will soon be considering the mitigation measures, according to a new plan released this week by the California Department of Insurance.
Insurance experts told the NBC4 I-Team there could be more discounts on work to protect homes and commercial properties from wildfires.
As the I-Team has documented for months, the insurance department says homeowners are being dropped from their policies for a variety of reasons, forcing them to turn to the California FAIR Plan as their only option, rather than the last resort it should be.
“Residents in every corner of California are frustrated with outdated regulations and are desperate for change,” State Commissioner Ricardo Lara said in a press statement this week.
“Whether you live in the Sierra or foothills, on the coast or in a city, California is not a 'one size fits all' place. We need to be inclusive. We're making big reforms that will get insurance companies writing more policies, so if you're bound by the FAIR Plan because of unique wildfire risk, there will be help for you,” he added.
The state also created its first wildfire risk map showing areas where insurers may need to expand coverage, including parts of Los Angeles, San Bernardino and Riverside counties.
These areas represent zip codes where more than 15 percent of policies are written under FAIR plans, as well as areas with lower incomes but higher premiums.
A map of affected residential and commercial areas and a list of zip codes can be found here:
New guidelines will require insurers to increase the coverage they offer in these areas. These changes are expected to be implemented by the end of the year.
“As well, there is a trailer bill attached to the budget that the Governor of California is about to sign, which will put some of these plans into effect immediately,” said Carl Sussman of Sussman Insurance Agency.
Sussman, an insurance agent with decades of experience in the insurance industry, told the NBC4 I-Team that insurers would also be allowed to use what's called a “catastrophe model” to determine individual owner's premiums, eliminating the need for a flat “flat” premium across the board.
“This is a good thing because it will allow consumers to know if they are in a higher-risk area than they thought, and it will require insurers to provide steps consumers can take to reduce the chances of their home burning down,” Sussman said.
The Department of Insurance's announcement said, “The regulatory package will require insurers to detail where they are insured on submitted premium returns, and the Department will use its existing enforcement powers to hold insurers to account. It will also require insurers using the catastrophe model to take into account measures taken by policyholders to mitigate wildfire risk.”
Sussman also said there is a mandatory element to these new expected changes.
“This is actually set out in regulations, the likes of which I've never seen before, that state what types of documents need to be kept, in what format and for how long,” he added.
The insurance department also points to a state law that gives insurers a one-year grace period from canceling or not renewing home insurance policies in certain areas near fire danger zones after Gov. Gavin Newson declares a state of emergency.
According to the department's website, “The Department of Insurance is partnering with the California Fire Insurance Division and the Governor's Office of Emergency Preparedness to identify wildfire boundaries and adjacent zip codes within the mandatory suspension area. Protection from cancellation or non-renewal will be in effect for one year from the date of the Governor's emergency declaration.”
This one-year protection applies to all homeowners in the affected area who suffered less than a total loss. Total losses include those who suffered no damage. Total losses receive additional protection under the law.”
