(Bloomberg Law) California policymakers are pushing property insurers to factor in the billions of dollars already spent for wildfire mitigation efforts when writing and renewing homeowner policies.
Catastrophe models that insurers want to use in setting rates around the state would have to account for efforts such as forest management and burying power lines under proposed regulations the state’s insurance commissioner is advancing. Meanwhile, state lawmakers are weighing legislation that would require carriers to account for wildfire mitigation actions in their underwriting models.
The effort reflects a tension that has emerged after disastrous wildfire seasons over the past decade drove insurers from the market, but also prompted significant spending on prevention efforts, with California dedicating nearly $4 billion to mitigation since 2017. Consumer advocates say that funding by taxpayers and utility companies can curb insurer losses.
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