California to require insurance discounts for property owners who reduce wildfire risk
California regulators may soon approve the state’s first fire insurance policy for homeowners, and the first one for multi-family rental properties.
The state Department of Insurance has asked for comments on a proposed bill that would add the state to the National Council of State Fire Marshals list of participating states. The proposal, which would give insurance companies an additional incentive to offer policies to owners who live and work in areas with high wildfire risks, is a response to a California fire insurance company’s threat to pull out of the state’s market after Governor Jerry Brown told insurers to offer policies to the state’s fire-resilient residents.
California Fire marshals
California would be the fifth state to join the National Council of State Fire Marshals. Other current or past members include: New York, Oregon, Washington, New Mexico and Colorado.
“The National Fire Safety Standard would make California a model for other states to follow,” said California State Fire Marshal Tom Hui. “It will help ensure that no person or organization is denied their right to affordable, high-quality fire and safety insurance coverage.”
The California Department of Insurance has said that the legislation, Senate Bill 1849, would help reduce “unsustainable costs” to the insurance industry and consumers.
The proposed bill would require those with commercial property insurance policies issued by insurers in California to pay 10 percent of the cost of installing, maintaining, or adding a smoke detection system to their buildings and would exempt multi-family rental properties from the requirement.
The proposed legislation would also require insurance companies to offer owners of residential and multi-family rental property to pay “a premium rate equal to 100 percent of the cost of the property insurance policy,” or a fee equivalent to the property damage liability limit of their policies in the first year after the bill became law.
The legislation also allows homeowners to reduce fire insurance premiums up to 10 percent by complying with the state’s mandatory fire prevention and education program. These costs would be offset by the use of property insurance policies that include a waiver of the state’s general