California State-Mandated Wildfire-Proofed Homes — For Now it’s not that Much

Part of the deal that will let insurers set higher property rates in wildfire prone areas is a requirement that they give rate discounts to property owners who fireproof the areas around their homes and their homes.

The discounts started on September 1st.

For example, State Farm’s policyholders that have fire resistant windows, or have installed them, will get a 0.1% premium reduction. Looking at the fine print, someone with $13,800 in premiums would save about $14.

Right now 13 states require insurers to give discounts to homeowners mitigating wind damage risk. California is the first state to apply that to fire. Kate Stillwell of the wildfire mitigation firm, FireBreak Risk says — unfortunately — the discounts are too small to really encourage much mitigation.

“The discounts are immaterial, and especially immaterial for any residents outside of a very high fire hazard zone,” Stillwell said. However, she expects they’ll eventually grow into something beneficial to homeowners.

“Discounts are a good thing,” former California Insurance Commissioner Dave Jones said. “But it's not in an absolute sense going to dramatically reduce the out of pocket [premiums] that someone pays.”

Julie Shiyou-Woodard is the CEO of Smart Home America. She thinks the tiny bit of savings is going to really limit the success of California’s program.

“It is tough to make a decision to put money that you may or may not have into your home or business when there’s only a wisp of a belief that you may see a reduction in premium at some point,” she said.

As an example, retrofitting a 2,000 square foot, two story home with flame and ember resistant vents, cleaning gutters and installing fire-resistant mulch could cost $10,000 to $15,000. Completely retrofitting a home will hit $23,000 at the low end and $40,000 toward the top. So many homeowners aren’t looking at much incentive at those costs when considering the paltry savings.

By mid-August, 63 insurers submitted proposed discounts. Just 48 have been approved so far.

Source link: E&E News — https://bit.ly/3XFKBbb