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Commissioner Lara enforces nation's first wildfire safety regulation … – California Department of Insurance

News: 2022 Press Release
SACRAMENTO, Calif. — Insurance Commissioner Ricardo Lara will enforce the new insurance pricing regulation he wrote recognizing and rewarding wildfire safety and mitigation efforts made by homeowners and businesses. Commissioner Lara’s regulation is the first in the nation requiring insurance companies to provide discounts to consumers under the Safer from Wildfires framework created by the California Department of Insurance in partnership with state emergency preparedness agencies. The regulation is now state law and enshrined in the California Code of Regulations.
"Protecting Californians from deadly wildfires means everyone doing their part, including insurance companies by rewarding consumers for being safer from wildfires," said Commissioner Lara. "The reality of climate change is driving my determination to help communities better prepare, help our firefighters save lives, and help more Californians find insurance they can afford. My Department will work diligently to increase discounts to reward the hard work that California consumers do to protect their families, homes, businesses, and communities.”
Commissioner Lara’s regulation requires insurance companies to submit new rate filings incorporating wildfire safety standards created by the Department, and to establish a process for releasing wildfire risk determinations to residents and businesses within 180 days. Transparency is an important benefit of this regulation, by requiring insurance companies to provide consumers with their property’s “wildfire risk score” and creating a right to appeal that score.
This regulation is part of a comprehensive solution that Commissioner Lara initiated after taking office to protect consumers from climate change-intensified wildfires. When Commissioner Lara took office in 2019, insurance companies representing 7 percent of the residential market provided insurance discounts and, under his leadership, that figure has grown to 40 percent. When this regulation is fully implemented, it will be 100 percent of the residential and commercial market aligned with the Safer from Wildfires framework.
Commissioner Lara directed the Department to write the regulation to protect consumers and improve market competition after hearing first-hand from consumers and business owners about their frustration with insurance companies that did not consider mitigation in their rating plans. During town hall meetings in more than 38 counties and an extensive Department investigatory wildfire hearing in 2020, many consumers testified that their homes and businesses were subject to “wildfire risk scores” that many did not know existed and had no right to appeal if inaccurate.
Regulation followed extensive public input and Safer from Wildfires partnership with Governor Gavin Newsom’s Administration
Commissioner Lara took what he learned from Californians to shape this rule that will promote a fair, transparent, and competitive insurance market. In October 2021, Commissioner Lara shared an initial version of the text of regulation. Following further public input, Commissioner Lara formally proposed his regulations in February of 2022 and held a public hearing to receive verbal and written comments before submitting the final regulation on September 1, 2022 for approval by the California Office of Administrative Law, of which that approval has now been received.
The regulation incorporates the Safer from Wildfires framework, created in February 2022 by a first-ever partnership between the Department of Insurance and the emergency preparedness agencies in Governor Newsom’s Administration, including the California Department of Forestry and Fire Protection (CAL FIRE), the Governor’s Office of Emergency Services (CalOES), the Governor’s Office of Planning and Research, and the California Public Utilities Commission.
“Home Hardening retrofits, along with Defensible Space significantly increase a home’s chance of surviving a wildfire,” said Chief Daniel Berlant, CAL FIRE Deputy Director of Community Wildfire Preparedness & Mitigation. “Using the latest fire science and recent wildfire data, these retrofits and landscaping requirements provide a strong path to structure survivability. CAL FIRE is currently funding over three hundred million dollars in local wildfire prevention projects to prepare communities against wildfire, but we know it will take every resident doing their part to ensure California is fully protected.”
Regulations will drive down costs and create transparency for consumers
The regulation requires insurance companies to submit new rates that recognize the benefit of safety measures such as upgraded roofs and windows, defensible space, and community-wide programs such as Firewise USA and the Fire Risk Reduction Community designation developed by the state’s Board of Forestry and Fire Protection, which currently includes the counties of Los Angeles, Santa Barbara, and Butte as well as cities and local districts.
“I applaud and welcome the new insurance pricing regulation developed by Commissioner Lara,” said Los Angeles County Supervisor Kathryn Barger, who represents approximately 2 million residents, including many who own properties in the county’s wildland urban interface. “Over the years, I’ve met with many wildfire survivors who were underinsured and, as a result, were financially ruined – left with a home that’s uninhabitable, that they can’t afford to repair, yet still liable for meeting their mortgage payments. The discounts offered to property owners who harden their homes and take action to mitigate wildfire threats are a financial reward that I believe will be embraced by many. This is a big step forward towards promoting community-driven preparedness and resilience.”  
“Commissioner Lara’s proposed regulation will transform the insurance landscape by rewarding wildfire risk reduction, creating safer communities and restoring access to affordable coverage,” said Amy Bach, Executive Director of United Policyholders, a 31-year-old non-profit assisting California insurance consumers whose statewide Wildfire Risk Reduction and Asset Protection (WRAP) working group is working toward the goal of this regulation. “Giving people a financial incentive to do their part is a critical and fair step to getting ‘all hands on deck’ to save homes and lives. United Policyholders strongly supports this common-sense and sustainable solution to the property insurance problems millions of Californians are experiencing.”
“Communities have been engaging in wildfire risk reduction through the national Firewise USA program for two decades,” said Michele Steinberg, wildfire division director for the National Fire Protection Association (NFPA). “The Firewise USA process requires annual preparedness work across neighborhoods, and a long-term commitment. This ongoing effort has proven to reduce property losses from wildfire and should factor into risk evaluations and insurance rates.”
“My regulation is the result of listening closely to the needs of consumers and businesses and crafting common-sense, lasting solutions that strengthen our ability to protect Californians from the threat of climate change-intensified wildfires,” said Commissioner Lara.
The Safer from Wildfires regulation is part of a larger solution that Commissioner Lara is pursuing for consumers and wildfire survivors that includes working to increase insurance protections and market competition to help protect consumers. Commissioner Lara’s actions since taking office in 2019 include, among others:
Support for wildfire safety regulation: What Californians are saying
Those supporting the regulation’s adoption include many on the front lines of wildfire safety such as fire leaders, local communities, homeowners groups, and agricultural businesses:
“We know firsthand that actions by property owners and communities can significantly reduce risks to lives and homes. The regulation proposed by the California Department of Insurance to require insurers to take projects such as vegetation management into account in setting premiums, to provide certain mitigation and wildfire risk information and to provide a process by which applicants and policyholders may appeal a wildfire risk score or classification assigned by the insurer will in turn incentivize property owners to further harden their homes, properties, and communities. We appreciate that the regulation will create more accurate risk assessments of properties and communities and better communication between insurers and residents.”
Mariposa County Supervisor Rosemarie Smallcombe, who represents areas around Yosemite National Park damaged by the recent Oak Fire
“California Professional Firefighters commends Commissioner Lara and the Department of Insurance for their ongoing work to respond to our State’s wildfire challenges. The Commissioner’s work to promote and strengthen home and community hardening, while improving access to homeowners’ insurance, are a critical part of the State’s response to these challenges.”
Brian K. Rice, President of the California Professional Firefighters
“Representing more than one-third of all housing units in California, Homeowners Associations across the state are taking wildfire mitigation actions at the community-wide level that will make residents safer. We support the regulation proposed by Commissioner Lara requiring insurance companies reward communities for their actions, helping save lives and protect access to affordable insurance.”
Jeffrey Beaumont, Chair of the Community Associations Institute, California Legislative Action Committee
“As climate change increases the severity of California’s fire seasons, California Farm Bureau members simply cannot conduct the business of farming without access to affordable, nondiscriminatory policies. This regulation could help reduce wildfire risk, by incentivizing individual and community mitigation measures that provide a return on those investments by policyholders, hopefully, through increased market competition, consumer choice, and access to comprehensive, affordable insurance across all of California.”
Jamie Johansson, President, California Farm Bureau
“Coalition for Clean Air agrees with Commissioner Lara that insurers should recognize consumers’ wildfire mitigation actions in their rate filings. Rates should provide incentives to harden homes and communities. Those actions will help save lives and homes, and will also reduce toxic smoke that is emitted when buildings burn.”
Bill Magavern, Policy Director, Coalition for Clean Air
“Realtors have been advocating for transparency with regard to fire risk scores for quite a while and we are pleased at Commissioner Lara’s efforts. The proposed regulations would compel insurance companies to consider a homeowner’s fire mitigation efforts in setting their rates. Homeowners deserve to be rewarded for their efforts.”
Anna Buck, Legislative Advocate for the California Association of REALTORS
“The Rancho Murieta Regional Fire Safe Council has for years pursued wildfire risk reduction through home hardening and fire fuels reduction measures that have contributed to ongoing overall wildfire safety in the community. Requiring financial acknowledgement by the insurance industry in their rating plans for homeowners and businesses which meet the criteria of ‘Safer from Wildfires’ will continue to provide a more favorable private insurability status by increasing the safety of communities.”
Greg Pryor, a retired firefighter and resident of Rancho Murieta in Sacramento County
“The need to get outdoors is greater than ever, and we have more Californians who want to go camping than we have camping accommodations. Yet one of the greatest barriers for campgrounds and RV parks is the ability to obtain insurance with appropriate coverage at reasonable rates. Providing rebates or rate decreases for fire abatement strategies will allow these small businesses to stay protected and in turn allow them to serve more California consumers.”
Dyana Kelley, President of the California Outdoor Hospitality Association, which represents RV parks and campgrounds across the state
“Despite a long history of proactive fuel reduction work, many owners in my community have found themselves priced out of fire insurance, or with their policies cancelled outright. I believe that communities and property owners who take proactive steps should have that work reflected in their insurance rates and strongly support the regulation.”
Katie Weber, a property owner in Yosemite West who worked with her neighbors to be certified as a Firewise USA community, which is recognized in the proposed regulation
“When my husband and I renewed our homeowners policy last year, we were astounded to see the cost had doubled with no recognition of the wildfire safety actions we have taken including working with our neighbors to become a Firewise USA community. This proposed regulation is clear on steps homeowners can take to reduce their fire risk. I wholeheartedly support the mandate that insurers take into consideration fire mitigation steps homeowners have taken when determining the risk of the dwelling and what cost should be assigned.”
Susan Frommer, a resident of Murrieta in Riverside County

Led by Insurance Commissioner Ricardo Lara, the California Department of Insurance is the consumer protection agency for the nation’s largest insurance marketplace and safeguards all of the state’s consumers by fairly regulating the insurance industry. Under the Commissioner’s direction, the Department uses its authority to protect Californians from insurance rates that are excessive, inadequate, or unfairly discriminatory, oversee insurer solvency to pay claims, set standards for agents and broker licensing, perform market conduct reviews of insurance companies, resolve consumer complaints, and investigate and prosecute insurance fraud. Consumers are urged to call 1-800-927-4357 with any questions or contact us at www.insurance.ca.gov via webform or online chat. Non-media inquiries should be directed to the Consumer Hotline at 800-927-4357. Teletypewriter (TTY), please dial 800-482-4833.
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