California to require insurance discounts for property owners who reduce wildfire risk
The California Legislature is reviewing a package of bills that would require a property owner who wants to reduce risk to be able to sell or use that property to do so by paying a discount.
State Sen. Toni G. Atkins, D-San Diego, and Assemblyman Phil Ting, D-San Francisco, on Tuesday introduced a dozen or more bills that would require commercial and residential property owners to have insurance that pays at least as much as the fire department would have paid under the state’s wildfire risk management program.
“Let it be known that we’re not going to pay a penny,” Atkins, a former teacher, said at a news conference. “We’re not going to wait and see, but we are going to put up a significant fire exclusion premium that is much less than they charge under the current program. … It’s not only going to cost the insurer less, it’s going to save a lot of taxpayer money.”
The legislation, which still has not been made public, would allow fire departments, which have been buying only $200 million in business and property insurance annually, to purchase up to $10 billion of insurance through the state’s risk management program.
Under the current program, property owners may purchase $5 million in coverage for a 25-year contract at the standard rate for the cost of insurance, the insurance industry’s current cost to a private firm.
But those bills would be able to purchase at least $2 billion of coverage at a discounted rate, under what Atkins called an “up-rating” program. A discounted rate for the program would be paid for the property owner by a private insurance company and would be passed on to consumers.
A California Association of Realtors spokesman said the property owners could save about $13 billion in insurance premiums over 25 years