California Announces New Incentives for Fireproofing Homes

California insurance commissioner Ricardo Lara recently announced that there would be new incentives put in place for owners of older homes who upgrade their properties to make them more fireproof.

The “home hardening” incentive is a partnership between the Governor Gavin Newsom and the California Department of Insurance. The insurance department will work with other government agencies to encourage measures to harden homes against wildfire danger. This will include actions such as replacing single pane windows with double pane as well as using fireproof wood treatments where possible. 

“With home and community hardening standards in place, Californians can hope to save lives and property through safer homes and increase insurance availability at the same time,” insurance commissioner Ricardo Lara said in a statement. “Our insurance market is responding to higher wildfire risk, so safeguarding homes will assist consumers in finding and keeping their insurance.”

Lara stated that he wants to encourage insurance companies to start rewarding homeowners who make efforts to protect their homes with lower premiums. 

“Both consumers and industry should embrace mitigation because we are at a crossroads, where we all realize that we have to reduce the overall fire risk and unfortunately, fires are not going to go away anytime soon,” Lara said in the statement. 

While protecting homes is the number one priority of these new measures, controlling the ever increasing cost of homeowners insurance in the state is also a major priority.

There are a number of older homes in California that are in need of fire mitigation work to help prevent them from catching fire and minimizing the damage if they do catch on fire. These measures are designed to incentivize owners of older homes to make fire mitigation efforts to their home and properties. 

“The main goal is to lower insurance premiums for people,” said fire insurance expert Mia Gonzalez in a recent California Globe article. “There’s a lot of older homes in California that can easily catch fire due to a lot of risks stemming from the houses not being upgraded for decades and not adhering to some basic fireproofing principles.”

Commissioner Lara also talked about the fact that many insurance companies have dropped covered in certain areas of California or have significantly raised their rates where fire risk is high. According to the commissioner, 31% of all insurers dropped residential fire policies in California between 2018 and 2019. This has led to a 225 percent increase in the number of homeowners purchasing a policy through the state run FAIR emergency fire insurance plan which is the state’s insurer of last resort. 

“It wasn’t outright said, but they also want less people on the state plan,” said Gonzales in the California Globe article.  “FAIR is for people who have no other option for fire insurance because it’s the equivalent of minimum coverage for cars. And if a fire hits, even with minimum coverage, it can cost a lot.”

“The state wants people back on private insurance and sees this as a cheaper way to do that rather than risk those FAIR people possibly getting large amounts of money should a wildfire occur,” concluded Gonzales.