“When I got it, it shocked me,” said Muller, a retiree whose insurer also covers her family’s cars and a home in
She called up her insurance broker who checked with five other carriers that all declined to make an offer and said the only other option would be the state FAIR plan, which is the state’s insurer of last resort. That option would be considerably more expensive for less coverage.
“So, what do you do? Pay the high premium!” added Muller, who declined to name the carrier to prevent any repercussions.
She’s not alone.
Those comments are just a small snapshot of what is occurring across the state of
The threat has continued in years since across the Golden State.
“We are seeing how badly consumers get hurt when there is no competition,” said
Her group has conducted a survey of 584 respondents that found almost 98% experienced a price increase in their homeowner policy this year, many of whom had a doubling in premiums.
State Insurance Commissioner
That could include such actions as clearing trees and shrubs around the structure or installing home-hardening items, including roofs that have the highest fire protection with such materials as fiberglass-asphalt composite or steel.
Lara unveiled the guidelines that were assembled with the help of officials from the
The guidelines would be similar in practice to what
“We can make homes and businesses safer because there is a one-to-one connection between safety and the cost of insurance,” said
The rule-making is latest step in the aftermath of the 2017 fires to adjust to the increased prevalence of wildfires. The initial action was reactive as many local homeowners whose property were destroyed or damaged almost five years ago found they were severely underinsured for the cost of rebuilding.
Others battled over procedures to detail their personal property loss while some ran out of coverage with their alternate living expenses before their homes got rebuilt. Lawmakers responded by passing legislation that would provide greater consumer protections for those whose homes would be destroyed in future fires.
The focus now is to be proactive in the marketplace to help protect homeowners amid carriers pricing for the greater frequency of wildfire threat and better help them understand what goes into such formulas and how they can take steps to reduce their bill.
Muller, for example, noted that she lives nearby a
There already has been some progress as more than a dozen companies now offer a discount on their own for fire-hardened homes, according to Lara’s office.
The industry has adapted to the increased prevalence and destruction by updating its wildfire risk formula. Carriers typically would rate fire risk based on how much brush and trees surrounded the property; whether it was located on a slope; and the accessibility for fire trucks to reach a home and whether a fire hydrant was nearby, Bach said.
They now use software that models risk with more sophisticated metrics. One company, Zesty.ai, notes that it can compile “vital property details and actual loss data with machine learning to produce a predictive risk score.”
The insurance industry, which is politically powerful in
It would be a voluntary program that included an educational component; a system of mitigation practices; and verification process that would bring a uniform standard to asses wildfire risk.
An industry spokeswoman said that framework was similar to what the
Meanwhile, consumer groups Consumer Watchdog,
The crux of the debate will come down to whether there can be a regulation that will incentivize homeowners to take steps knowing that they will be rewarded on their bill, Bach said.
“People need financial incentives in order to put the time and money into wildfire risk reduction,” she said. “They need to know it’s going to benefit them because otherwise people are not going to do it.”
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