California Insurance Department Approves State Farm Discount — Consumer Watchdog Complains

In one of many efforts to get State Farm to stay in California and write homeowners insurance policies, California Insurance Commissioner Ricardo Lara has approved State Farm’s discount reduction plan to homes meeting the state’s Safer from Wildfire regulations.

His approval has already met with the disapproval from Consumer Watchdog.

The discount program will begin on September 1st and State Farm will offer a 6.3% discount to those homes. As it stands now — and until September 1st — State Farm gives a 7% discount to homes meeting California’s Safer from Wildfire regulations.

Consumer Watchdog disapproves of Lara’s decision and filed a petition to get homeowners even larger discounts for meeting the regulations from Safer from Wildfire. Lara denied that petition.

State Farm says it will give homeowners an additional 2% to 3.8% discount if they get a certificate of safety from the Insurance Institute for Business and Home Safety. However, to get that certificate, a homeowner has to pay a $125 fee for the inspection.

Consumer Watchdog’s attorney, Ryan Mellino said that pretty much wipes out the first year’s benefit from the discount.

“The commissioner’s failure to ensure that consumers are given the information necessary to understand their wildfire risk and sufficient incentives to mitigate their properties is disappointing,” Mellino said. “Discounts this small don’t incentivize mitigation and won’t make our state safer from wildfires.”

Another concern from Consumer Watchdog is Lara’s decision to not require State Farm to explain in writing what their wildfire risk classification is and the reasons behind that classification.

By the way, these are some of the Safer from Wildfire regulations:

  • Homeowners must have a Class-A fire rated roof.
  • There must be a five-foot ember resistant zone, including fencing.
  • Ember- and fire-resistant vents are required.
  • The home must be non-combustible from the ground to six inches.
  • Eaves must be enclosed, and windows upgraded.
  • Vegetation, weeds, and other debris must be cleared from underneath decks.
  • Combustible sheds and other outbuildings must be removed or be 30 or more feet from the home.

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