Wildfire & Insurance — Legislation in the PIA Western Alliance States

Several PIA Western Alliance states — California, Oregon and Hawaii — are considering bills to address homeowners insurance and wildfires. California’s legislators have introduced the largest number.

In California, Senate Bill 876 looks at requiring insurance companies to release disaster-recovery plans with the California Department of Insurance and with insureds when disaster strikes and a claim is filed. Each violation of not complying during declared emergencies will go from $5,000 to $10,000 per claim.

Insurance Commissioner Ricardo Lara has sponsored several bills. The first will expand the limits of living expenses by 100% in the case of total loss. He also wants a bill passed that forces an upfront, cash-value payment to be made to a client within 30 days of the signing of a contract to rebuild a home or to buy a new one.

Lara also wants insurers to offer more extended and guaranteed replacement cost coverage when offering a policy to an insured.

Senate Bill 878 will force an insurer to pay 20% annual interest if they fail to make a claims payment by the agreed to deadline.

A bill in the assembly — Assembly Bill 1559 — requires insurers to notify patrons when an aerial video is going to record their property.

Oregon’s Legislature is looking at a bill in the senate involves wildfire prevention. The bill requires insurance companies to take wildfire prevention done on homes into account when setting premium prices if the insurer uses wildfire risk modeling.

Insurers not using wildfire risk modeling to set rates will be required to give a discount on premiums, or another incentive, if the insurer has done wildfire mitigation to their property.

Former California Insurance Commissioner Dave Jones thinks the Oregon bill is a good one.

“Despite homeowners investment in home hardening and defensible space, and despite public investments in community-level mitigation, many, if not all, insurers are not taking these mitigation measures into account in the computer models they use to price and to decide whether to write or renew insurance, what’s called underwriting,” Jones said.

Homeowners in Hawaii are looking at double-digit rate hikes after the fires that destroyed huge parts of Maui two years ago. Exposure has insurers pushing rate hikes as high as 32%.

AM Best’s Chris Draghi said the rates are being pushed by inflation, risk and weather patterns. State Farm had a 28.5% average rate hike approved last year.

Source link: CalMatters — https://bit.ly/3LShuzq

Source link: PropertyCasualty360.com — https://bit.ly/4qPLGdG

Source link: Insurance Business America — https://bit.ly/4k3KdO9