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California Å˽ðÁ«´«Ã½Ó³»­ Commissioner Ricardo Lara announced new regulations he believes will improve wildfire safety and drive down the cost of insurance for homeowners and businesses.

The proposed regulations, which could be in effect by this summer, call for insurance companies to factor wildfire safety actions into the pricing of residential and commercial coverage.

The is part of Lara’s “Safer from Wildfires” insurance framework he introduced earlier this month.

The new regulations are also intended to provide consumers with transparency about their “wildfire risk score” that insurers assign to properties.

“With more Californians rolling up their sleeves and reaching into their own pockets to protect their homes and businesses, insurance pricing must reflect their efforts,” Lara said in a statement. “Holding insurance companies accountable for accurately rating wildfire risk in the premiums they charge Californians will help save lives and reduce losses. My new regulations will help encourage a competitive insurance market for all by putting safety first and driving down costs for consumers.”

The regulations will require insurers to comply with Proposition 103, passed by voters in 1988 to give the commissioner authority to approve rates by incorporating the new framework in “wildfire risk scores.”

It’s believed the regulations will help Lara increase consumer discounts that insurance companies offer for safer homes and businesses. Currently, 17 insurance companies representing 40% of the insurance marketplace have answered Lara’s call to offer discounts, up from just 7% of the market when he took office three years ago, according to the California Department of Å˽ðÁ«´«Ã½Ó³»­.

Stronger California, a coalition that includes the American Property Casualty Insurers Association, the Personal Å˽ðÁ«´«Ã½Ó³»­ Federation of California, and most California insurers, issued a statement that it supports the goal of signaling consumers about the need to better prepare for extreme wildfires and that it will review the proposed regulations.

“Insurers have long advocated for similar mitigation steps recommended in the Safer from Wildfires framework,” the statement continues. “We look forward to continuing to work with the California Department of Å˽ðÁ«´«Ã½Ó³»­ to better prepare Californians and mitigate damage from extreme wildfires.”

The CDI scheduled a public when people can testify on the proposal.

Related:

• California Issues 1-Year Moratorium on Homeowner Å˽ðÁ«´«Ã½Ó³»­ Cancellations And Non-Renewals
• California Commissioner Issues Another Non-Renewal Moratorium to Aid Policyholders Affected by Wildfires
• California Commissioner Issues Non-Renewal Moratorium to Aid Policyholders Affected by Wildfires

Topics Catastrophe California Natural Disasters Carriers Legislation Wildfire