On Thursday, the Senate Insurance Committee held an informational hearing regarding the homeowners’ insurance market. Chaired by Senator Richard Roth (D-Riverside), top level officials from the Department of Insurance, CALFIRE, local government, insurance industry organizations, and consumer advocate organizations provided testimony on the impact of climate change, drought, and wildfire risk to the residential insurance market.
In the aftermath of last year’s Valley Fire (Lake/Napa/Colusa Counties) and Butte Fire (Amador/Calaveras), two of the largest fires in California’s history, many rural property owners have noticed a recent surge in premiums, non-renewal, or cancellation of their policies, and experienced increasing difficulty in obtaining insurance coverage for their homes, specifically those residents who live in fire hazard severity zones. During public comment, one homeowner testified that in 2015 her insurance premium had reached $12,000 annually, with a $22,000 deductible.
Several recommendations were made, including Insurance companies providing incentives to homeowners who have proactively managed their structures and property and maintained defensible space requirements.
The consensus of the hearing was that much more work needs to be done to ensure that homeowners in high fire risk areas continue to have access to affordable insurance.