New California laws aim to ease ongoing home insurance crisis

California has approved a package of new laws meant to stabilize the state s faltering home insurance industry and help property owners protect their homes from wildfires and recover when they lose everything in a blaze The ordinance signed by Gov Gavin Newsom this month is the state s latest effort to tackle an insurance situation that s left thousands of homeowners facing steep rate hikes canceled coverage and long delays securing claim payments Despite a modern plan to overhaul California s strict insurance regulations in hopes of persuading carriers to expand coverage in fire-risk areas a large number of homeowners have yet to see any immediate changes While the latest laws are only incremental efforts toward fixing the emergency they aim to provide certain homeowners meaningful relief Here are three of the most of potentially impactful reforms Fire-safe grants for homeowners Assembly Bill establishes a grant operation to help low- and middle-income homeowners pay for wildfire defense measures such as installing fire-resistant roofs and clearing flammable vegetation from their properties improvements that can cost thousands or even tens of thousands of dollars but qualify for insurance premium discounts It will now be up to state lawmakers to determine how much grant money individual homeowners could receive Cities and counties will also be able to apply for the grants for fire mitigation programs to make communities safer and potentially more insurable For a homeowner to be eligible for the money their property would need to be insured by a state-approved provider and in a ZIP code that overlaps with a high or very high fire hazard zone as listed by CalFire That includes wide swaths of largest part Bay Area counties A property owner s earnings would need to be within the low-income limit for their county as defined by the state housing department That definition is broad however In Santa Clara County for example a family of four earning up to a year would qualify as low-income and be eligible The bipartisan bill authored by Assemblymember Lisa Calderon a Democrat representing Los Angeles County follows an executive order by Newsom earlier this year to require a great number of homeowners to create a -foot ember-resistant zone around their houses Newsom ordered state bureaucrats to finalize the Zone Zero rules by the end of the year Higher minimum payout for wildfire states When a home is fully destroyed in a blaze insurers will soon be required to pay out at least of an owner s personal property coverage limit up to even before receiving a complete list of destroyed household items such as appliances electronics and jewelry Previously insurers only had to advance of coverage capped at Senate Bill authored by Sen Ben Allen a Democrat from Los Angeles will go into effect next year Allen introduced the bill after learning about the struggles specific homeowners faced in cataloging their lost items to secure insurance payouts after their properties were destroyed in the Los Angeles wildfires in January The new LA Fires exposed intricate inefficiencies in our insurance system that unnecessarily delay the urgently needed financial assistance survivors are justly due Allen declared in a comment Additionally the law grants property owners days to provide insurers with proof of property damage following a declared state of exigency Insurers initially pushed back on the bill but industry groups dropped their opposition after lawmakers agreed to lower the advance payment requirement from to You would have had massive massive payouts that would be unjustified declared Seren Taylor vice president for the Personal Insurance Federation of California Stabilizing the FAIR Plan Assembly Bill aims to ensure the FAIR Plan the state s last-resort insurance initiative doesn t run out of money after a catastrophic blaze The FAIR Plan is a state-created privately managed insurance pool for homeowners who can t find traditional coverage because their properties are deemed too risky As worsening climate-driven wildfire seasons have scorched the state in up-to-date years the number of homeowners forced onto the plan s expensive bare-bones coverage has surged to almost Related Articles AI-powered Bay Area home insurance startup expands in risky markets Ghost networks How insurance errors endanger California patients Check out specific wildfire-related bills that Gov Newsom signed last week New California law aims to stabilize homeowner insurance for people who can t get private coverage Opinion State s FAIR plan meant to cover riot-prone areas not setting disasters Last year FAIR Plan functionaries warned the undertaking could become insolvent following a major wildfire Then after the Los Angeles blazes destroyed more than structures the plan noted it faced roughly billion in losses and was running out of money to pay declares The state approved a billion bailout from private insurers with half the cost expected to be passed onto policyholders The new law which passed with near-unanimous assistance from Democrats and Republicans allows the FAIR Plan to request state-backed bonds and open lines of credit The goal is to give the plan more flexibility in raising money to pay out homeowner proposes in turn requiring fewer bailouts and rate hikes The kinds of climate-fueled firestorms like we saw in January will only continue to worsen over time Newsom revealed in a announcement That s why we re taking action now to continue strengthening California s insurance realm to be more resilient in the face of the situation predicament