California seeks to establish new fire-safe standards for homes, insurers

California Insurance Commissioner Ricardo Lara on Monday announced an effort to establish home-hardening standards that could protect participating homeowners from canceled policies and soaring rates while providing a mechanism to encourage fire-safe retrofits that could save lives and property.

The effort, which will begin this month with meetings between state insurance, utilities, emergency and forestry leaders, will face a tight timeline, as it comes amid deepening worries over home insurance costs and availability in wildfire-prone areas of the state, where wildfire losses continue to mount.

“The commissioner’s goal is that there’s no time to waste on this,” Deputy Insurance Commissioner Michael Soller said in an interview Monday. “He would like to see standards be in place this year that insurance companies can start using to identify incentives for people, and that local governments can use to help guide some of their planning decisions and investments they’re making.”

The parameters of the statewide initiative have not been worked out, but officials say any move to implement uniform statewide standards for homeowners would likely be coupled with concessions and incentives from insurance companies, as well as new streams of state funding to offset home retrofit costs.

Sonoma County Supervisor Lynda Hopkins called the effort a hopeful step.

“It creates an incentive to take personal responsibility for living in a wildfire area,” said Hopkins, the Board of Supervisors chair whose west county district lost more than 150 homes last summer in the 55,000-acre Walbridge fire. “What’s critical is you’re only as safe as your neighbors when it comes to wildfire risk. You need a community approach. The more we can create systems of incentives, that’s a very powerful tool.”

A dwindling market for homeowners insurance has spooked Sonoma County residents looking to rebuild in the aftermath of five large wildfires in the past four years, including the 78,000-acre Kincade fire, the county’s largest.

But state legislation meant to require insurance companies to write or renew policies for existing homes in communities that meet home-hardening standards has so far stalled.

In turn, Lara has used his own regulatory authority to act. Near the end of 2019 and 2020, he banned insurance companies from canceling coverage for people residing in or near areas where large fires burned, including the Kincade, LNU Complex and Glass fires in Sonoma County. The bans carried 1-year terms.

Lara announced in September the framework for a push toward home-hardening standards and requirements on insurers meant to reward property owners who make their residences fire safe.

Amy Bach, executive director for United Policyholders, which has pushed for state standards for the better part of a year, said the problem has been building since 2016, and a string of deadly and costly California wildfire seasons have exacerbated what she called the “homeowners insurance market crisis.”

Insurers, Bach said, haven’t yet been willing to play a constructive role.

“People are rolling up their sleeves and trying to fix the situation on their own, and insurance companies have been sitting on the sidelines,” Bach said. “They haven’t been willing to acknowledge the value of mitigation. They haven’t been willing to give discounts or preferential treatment.”

Lara’s Insurance Department will partner with Gov. Gavin Newsom’s administration, including the Office of Emergency Services, the California Department of Forestry and Fire Protection, the Office of Planning and Research and the California Public Utilities Commission to craft the standards.

The insurance rules and fire-safe standards could include reducing the amount of vegetation around homes and using fire-resistant building materials. They would likely apply only to so-called fire-prone areas, which would be determined with help from Cal Fire, Soller said.

Millions of Californians live in those fire-prone areas, from the hilly outskirts of Santa Rosa and to vast swaths of the Sierra Nevada foothills and sprawling Southern California subdivisions — altogether home to 11 million Californians. More than half of the state’s structure losses in wildfires over the past three decades have occurred in those areas, according to a 2019 U.S. Forest Service study.

Soller said no standards or upgrades are set in stone, but he pointed to Cal Fire’s list of 10 low-cost ways to harden your home as a place state leaders will likely start. Among the suggestions: leaf guards on gutters, screens on chimneys and patching and plugging any outside gaps or cracks that could trap wind-blown embers during wildfires.

Sen. Bill Dodd, D-Napa, said the unified approach from top state leaders is critical, especially as the state endures another year of below-average rainfall, fueling risk for a potentially explosive fire year.

“People need to know that they have to act now,” Dodd said Monday. “The moment is not a year from now, it’s not two years from now. It’s not fighting your insurance company on this. It’s not fighting your government on this. This has got to be done or your way of life will cease to exist.”

The cost to treat wooded land by hand or machine to reduce fire-prone fuels can run up to $4,000 an acre, a costly endeavor Dodd acknowledged. He said he plans to introduce legislation this year that will make $50 million to $250 million available to homeowners in the form of grants or loans targeting home hardening.

For Dodd, the cash grants, state efforts and local ordinances, like Sonoma County’s defensible space rules, can all work to push the state toward a safer future.

“None of these bills, these policies, all by themselves, really do enough to move great lengths,” Dodd said. “When they’re all put together in a patchwork quilt of legislation, they’re really starting to make a big difference.”

Bach, with United Policyholders, said statewide standards are key for getting insurance companies to buy in.

“There’s a lot of good work and energy going into fortifying homes and communities to reduce the severity of future wildifres,” Bach said. “That’s imperative to continue. We need insurance companies to participate. We need insurance companies to communicate to their customers what steps they should be taking, and we need insurance companies to reward people for taking those steps.”