Tuolumne County residents could receive discounts on homeowners insurance for work they’ve done to protect their homes and properties from fire under a proposed regulation that was announced Wednesday by California Insurance Commissioner Ricardo Lara.
Lara, a Democrat who’s seeking reelection in November against Republican challenger Robert Howell, described his proposal as a “first-in-the-nation” regulation meant to reward and incentivize homeowners for investing in wildfire safety and mitigation efforts.
“My groundbreaking regulation will help more Californians find insurance they can afford,” Lara stated in a news release Wednesday. “It aligns insurance discounts with fire safety actions being expedited by our state emergency leaders and local governments. And, most importantly, it will save lives by helping California become safer from wildfires.”
For years, Tuolumne County homeowners have endured skyrocketing insurance costs due to the increasing frequency of large wildfires throughout the Golden State.
Many in the county have also been forced to purchase more expensive policies for fire coverage through the California FAIR Plan, the state’s insurer of last resort for homeowners unable to find coverage on the private market.
Tuolumne County had the highest percentage of policies under the California FAIR Plan at 28.7% in 2020, the most recent year of data currently available. That was up from 20.5% in 2019 and 0.8% in 2015.
Lara’s spokesman, Michael Soller, said the proposed regulation submitted Wednesday would also offer discounts for people with FAIR Plan policies if it’s approved by the California Office of Administrative Law, which has 30 working days to make a decision.
If approved, Soller said insurance companies will have 180 days to submit their new rate plans that incorporate the mandated discounts to Lara’s office. The regulation does not mandate how much they have to reduce prices for those who qualify.
“Insurance companies will have to look at their loss records and data and come back to us so we can validate that,” Soller said in a phone interview Thursday. “There will still be a difference in what companies offer, which we think is good for consumers to have different options.”
Homeowners will qualify for the discounts based on whether they’ve completed improvements to their properties as outlined under Lara’s “Safer from Wildfires” standards that were in collaboration with emergency response and fire officials in the state.
The standards include having a fire-resistant roof, clearing vegetation within at least 5 feet around a home, and removing any overgrowth (see below for the full text of the standards).
How companies inspect to ensure those standards are met will be part of the plans they submit, and the regulation requires them to disclose how those determinations are made and establish a process for homeowners to appeal, Soller said.
Soller said the hope, too, is that private insurers will also begin writing more policies again in places like Tuolumne County and other fire-prone areas by recognizing work being done on fire prevention in communities.
“We expect that we’re going to see more insurance companies writing more policies in areas that have made themselves safer from wildfires,” he said. “We’ve been to Tuolumne and Calaveras (counties), and the work that’s happening on the local level is incredible.”
Tuolumne County officials who have been vocal about the issues in recent years applauded the proposed regulation as a step in the right direction, though they said much more still needs to be done to improve the situation for local homeowners.
County Assessor-Recorder Kaenan Whitman, who has been following the issue, said from personal experience that many people who have been relegated to coverage through the FAIR are having to pay at least double what they previously did on the private market.
“We were paying $2,200 (per year) and when we got dropped and went onto the FAIR Plan, then we went up to $4,900,” he said of his own insurance struggles. “The FAIR Plan doesn’t cover everything, so you have to get another plan to cover those things that it doesn’t, which typically costs around $1,200.”
Whitman said it isn’t fair that Tuolumne County is getting hit so hard when other areas have experienced far more destructive fires. He added that he and other county officials are trying to open a dialogue with risk assessment companies like ISO that insurers look to when determining where they will write policies.
The county has a number of resources to aid fire mitigation efforts and has invested millions in recent years on fuel reduction projects to better protect communities, Whitman said.
“We have an air attack base, we have a lumber mill, we have a biomass energy facility, but it feels like none of that is getting taken into consideration,” he said. “I felt maybe it’s not their fault, maybe we’ve done a poor job at communicating our efforts to them.”
County Supervisor Anaiah Kirk has also expressed frustration over the years about the insurance issue and a lack of recognition by companies on the work being done by homeowners and communities to better protect themselves from fire.
Kirk’s sentiments mirrored many of those expressed by Whitman, whom he’s been working with to address the problem. Whether people in the county actually see any meaningful benefits from the proposed regulation will be the ultimate test, he said.
“My first impression is this is great, but it doesn’t mean an insurance company has to provide coverage,” he said. “They still have the ability to choose if they want to provide coverage.”
Lara’s three-pronged “Safer from Wildfires” standards for home hardening and fire prevention, which would be used to determine whether a homeowner is eligible for discounts on insurance, are as follows:
1. Protecting the structure
• Class-A fire-rated roof
• Maintain a 5-foot ember-resistant zone around a home (including fencing within 5 feet)
• Noncombustible 6 inches at the bottom of exterior walls
• Ember and fire-resistant vents
• Upgraded windows (Double paned or added shutters)
• Enclosed eaves
2. Protecting the immediate surroundings
• Cleared vegetation and debris from under decks
• Removal of combustible sheds and other outbuildings from the immediate surroundings of the home, to at least a distance of 30 feet
• Defensible space compliance (including trimming trees, removal of brush and debris from yard, and compliance with state law and local ordinances)
3. Working together as a community
• A community should have clearly defined boundary and a local risk assessment in consultation with the local fire district or state fire agency; an identified evacuation route, cleared of vegetative overgrowth, and evacuation plan contingencies; clear funding sources to implement community mitigation activities and meet clear risk reduction goals; and integrated and up-to-date local planning documents pertinent to community wildfire risk.
• Current examples include the Fire Risk Reduction Community designation under development by the Board of Forestry, Firewise USA communities in good standing, and Shelter-in-Place designations.
Contact Alex MacLean at amaclean@uniondemocrat.com or (209) 588-4541.