California to require insurance discounts for property owners who reduce wildfire risk
The recent California wildfire has triggered a new discussion about how to protect property owners against the rising costs of emergency response in California.
In the months following the 2018 fire, the California Emergency Management Agency (EMSA) in collaboration with insurance carriers and the California State Board of Equalization (SCBE) introduced new emergency response policies to protect property owners. These policies are designed to provide homeowners with better fire insurance protection, with some provisions tailored to protect homeowners who take proactive action with regard to reducing their risk in advance of a wildfire event.
Following are the proposals: (1) All homeowners who own properties or have a business in areas that are at high risk from wildfire must obtain at least $5,000 in fire insurance to cover the replacement cost of their property if they do not take action to prevent a wildfire; (2) All homeowners and business owners in areas that are high risk must obtain at least $10,000 in fire insurance to cover the replacement cost of their property if they do not take action in advance of a wildfire; (3) All firefighters and first responders serving in high risk areas must obtain at least $500,000 in fire insurance to cover the replacement cost of their property if they do not take action in advance of a wildfire; and (4) All business owners in high risk areas that do not take aggressive action to protect their properties in advance of a wildfire must also obtain at least $500,000 in fire insurance to cover the replacement cost of their property.
These new policies require property owners and business owners to take action to minimize the future risks of a wildfire, and provide the level of protection that is required by the insurance carriers that insure them and the California courts.
We need to take action now to protect our communities from these risks.
Sidney Hillman, President and CEO, Los Angeles Regional Chamber
On December 29, 2018, the North West Regional Fire Authority’s chief firefighter, Scott Smith, said the following regarding these proposed policies:
“These policies make clear that if there is an emergency, these homeowners and business owners will be required to take responsibility for their own homes and businesses. As a leader in the building and real estate industry, it is critically important that building owners take the time and step into action to address their own risk.
We do not have the luxury of waiting for a wildfire to occur. We need to ensure that we