California sets wildfire standards, aiming to keep home insurance affordable

Stricter safety standards for older homes seek to encourage providers to keep covering them

Ricardo Lara with California (Getty, iStock)
Ricardo Lara with California (Getty, iStock)

California unveiled standards to keep older homes safe from wildfires, aiming to keep insurance costs affordable after fires last year consumed about 4.2 million acres, damaged or destroyed almost 10,500 structures and killed 30 people.

The rules, announced yesterday, include a fire-resistant roof, at least five feet of defensible space around the home and a clearly defined evacuation route, the Mercury News reported. While the state already has standards for homes built before 2008, the new standards aim to encourage insurance companies to offer discounts and provide incentives to retrofit older homes.

Twelve insurers, representing 40 percent of the market, offer discounts to owners who take measures to protect homes, compared with 7 percent three years ago, the newspaper reported, citing Insurance Commissioner Ricardo Lara. “Reducing the wildfire risk is critical to making insurance available, reliable and affordable for all Californians,” he said.

Homeowners will have access to millions of dollars from state and federal grants to bring their homes up to the new standards, officials said.

Insurance companies concerned about wildfire exposure have cut back on their homeowner coverage, and some even elected to end coverage for multimillion-dollar estates. In January, American International Group said it wouldn’t renew home policies of 9,000 customers of its Private Client Group. Chubb, the largest high-end insurer in California, also said it wouldn’t renew some of its policies.

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Five of California’s 10 largest wildfires on record occurred in 2020, when the state set a record for acres burned, according to NASA’s Jet Propulsion Laboratory in Pasadena.

Some builders are taking advantage of wildfires by touting “fireproof” homes framed in lightweight steel construction instead of wood, making them easier to rebuild. Dvele, a company that markets steel prefabricated homes, said sales surged after it waived design fees and offered discounts for fire victims.

Lara’s office devised the new standards along with the Governor’s Office of Emergency Services, the California Department of Forestry and Fire Protection, the California Public Utilities Commission and the Governor’s Office of Planning and Research.

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[MN] — Victoria Pruitt