Insurance discounts to reward wildfire safety efforts | SierraSun.com
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Insurance discounts to reward wildfire safety efforts

State Insurance Commissioner Ricardo Lara will enforce the new insurance pricing regulation he wrote recognizing and rewarding wildfire safety and mitigation efforts made by homeowners and businesses.

Commissioner Lara’s regulation is the first in the nation requiring insurance companies to provide discounts to consumers under the Safer from Wildfires framework created by the California Department of Insurance in partnership with state emergency preparedness agencies. The regulation is now state law and included in the California Code of Regulations.

“Protecting Californians from deadly wildfires means everyone doing their part, including insurance companies by rewarding consumers for being safer from wildfires,” states Lara in a news release. “The reality of climate change is driving my determination to help communities better prepare, help our firefighters save lives and help more Californians find insurance they can afford.”



Lara’s regulation requires insurance companies to submit new rate filings incorporating wildfire safety standards created by the Department of Insurance and to establish a process for releasing wildfire risk determinations to residents and businesses within 180 days. The news release notes that transparency is an important benefit of this regulation, requiring insurance companies to provide consumers with their property’s “wildfire risk score” and creating a right to appeal that score.

In 2019 insurance companies representing 7% of the residential market provided insurance discounts. Today that figure has grown to 40%, according to Department of Insurance data. When this new regulation is fully implemented, it is expected to be 100% of the residential and commercial market aligned with the Safer from Wildfires framework.



Lara directed the Department of Insurance to write the regulation to protect consumers and improve market competition after hearing first-hand from consumers and business owners about their frustration with insurance companies that did not consider mitigation in their rating plans. During town hall meetings in more than 38 counties and an extensive Department of Insurance investigatory wildfire hearing in 2020, consumers testified that their homes and businesses were subject to “wildfire risk scores” that many did not know existed and had no right to appeal if inaccurate.

Home hardening retrofits, along with defensible space, significantly increase a home’s chance of surviving a wildfire, according to Chief Daniel Berlant, Cal Fire deputy director of Community Wildfire Preparedness and Mitigation. “Using the latest fire science and recent wildfire data, these retrofits and landscaping requirements provide a strong path to structure survivability,” he states, adding that Cal Fire is currently funding more than $3 million in local wildfire prevention projects to prepare communities for wildfire.

The new wildfire safety regulation requires insurance companies to submit new rates that recognize the benefit of safety measures such as upgraded roofs and windows, defensible space and community-wide programs such as Firewise USA and the Fire Risk Reduction Community designation developed by the state’s Board of Forestry and Fire Protection, which currently includes the counties of Los Angeles, Santa Barbara and Butte, as well as cities and local districts.


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