California to require insurance discounts for property owners who reduce wildfire risk
The state of California has taken a major step toward protecting homeowners from catastrophic wildfires by requiring insurance companies to offer discounts to owners who install fire prevention measures like sprinklers and smoke alarms.
In an early April court filing, the state’s Board of Equalization estimated that the California Insurance Crime Prevention Act would save homeowners up to $2.6 billion in wildfire losses.
The bill, which requires insurance companies to offer discounts to homeowners who install measures like fire sprinklers and smoke alarms, passed both chambers of the state legislature in June.
Despite the passage of the bill, homeowners in some parts of California are waiting for the state to issue an official rule that outlines which insurance discounts and other requirements it plans to implement. It is unclear if the state will issue a formal decision on the issue before the insurance industry is allowed to begin offering discounts.
The California Insurance Crime Prevention Act was originally enacted with bipartisan support in 2013, and required insurance companies to offer discounts to homeowners who install fire prevention measures like smoke alarms, burglar alarms and sprinklers.
The California Insurance Crime Prevention Act also required insurers to offer discounts to homeowners who install fire sprinklers or other fire prevention measures, and if either were installed, to provide discounts of up to 20 percent on the property’s property and casualty insurance.
This requirement is not the only aspect of the act that is still being finalized, however, as the state is also discussing the prospect of forcing insurers to offer discounts to homeowners who install fire extinguishers or other fire prevention devices on their properties.
While the fire prevention measure is currently being considered by the state legislature, the insurance industry is currently negotiating with the state to implement the requirements.
According to a March report from the Huffington Post, the insurance industry has been pushing back against the state’s requirement, arguing that it would not have any measurable benefits on wildfire mitigation.
“This bill just takes a little bit of water away from efforts that have already been made to mitigate wildfire,” said Sean Sweeney, a spokesperson for the Insurance Defense Alliance, a leading nonprofit representing the insurance industry. “No one knows how much money we’re going to save. It’s very much uncertain.”
According to the Huffington Post report, insurance industry lobbyists are pressuring the state to implement the fire prevention requirements