Wildfire-Prone California To Consider New Rules For Property Insurance Pricing

CBS Los Angeles

September 22, 2023

A new plan from California's insurance commissioner aims to stop the nation's top insurers from leaving the wildfire-prone state by letting them consider climate risks when setting their prices.

Unlike most states, California tightly restricts how insurance companies can price policies. Companies aren't allowed to factor in current or future risks when deciding how much to charge for an insurance policy. Instead, they can only consider what's happened in the past on a property to set the price.

At a time when climate change is making wildfires, floods and windstorms more common, insurers say that restriction is making it increasingly difficult for them to truly price the risk on properties. It's one reason why, in the past year, seven of California's top insurance companies have paused or restricted new business in the state.

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