The California Insurance Commissioner Ricardo Lara’s office announced a new regulation that will require insurers to offer coverage in high-risk areas to homeowners who have struggled to find or lost access to home insurance due to increasing wildfires in the state.
Insurers will be mandated to increase their coverage by 5% every two years until reaching 85% of their market share, ensuring coverage availability in high-risk areas.
The big picture: This new requirement will go into effect within 30 days to address the challenges faced by homeowners in wildfire-prone regions.
- Major insurers such as State Farm and Allstate had announced plans to stop writing new policies in California due to concerns about substantial losses from wildfires and other natural disasters.
- The California Department of Forestry and Fire Protection highlights that since 2015, 14 out of the top 20 most destructive wildfires in state history have occurred.m
What they’re saying: Insurance Commissioner Ricardo Lara emphasized the importance of ensuring a reliable insurance market for communities vulnerable to wildfires and climate change.
- “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.”
