California lawmakers aim to bring insurance companies back again

Insurance Companies Laws - California

Congressional reps from the Bay Area are seeking to draw insurers with legislation changes

Congressional representatives in California’s Bay Area are working on legislation that they hope will appeal to home insurance companies and bring them back into the state.

California has been bleeding property insurers

The new legislation could help insurance companies to decrease their losses by providing property owners with financial incentives to better their emergency preparedness.  Though this might not stop some of the major threats to the area, such as wildfires, it could be beneficial in reducing the amount of damage caused if they make their way close to a property.

Insurance Companies - Homes destroyed by fire - property insurers

Bipartisan legislation was recently announced by US Rep. Mike Thompson (D-St. Helena) to form a grant program and provide property owners with tax breaks when they make efforts to protect their properties against disasters such as wildfires.

The newly announced legislation was co-authored by Rep. Doug LaMalfa (R-Richvale) and had Rep Jared Huffman’s (D-Marin) sponsorship, among others.

Appealing to insurance companies with the Disaster Resiliency and Coverage Act

The bill is House Resolution 7849 and is known as the Disaster Resiliency and Coverage Act.  It has arrived at a time in which insurers of all sizes have been announcing that they are not renewing policies, ceasing selling entirely, or leaving the state altogether.  This has made it far more challenging and expensive for property owners to find coverage, particularly when it comes to policies that offer the coverage they need and at an affordable price.

The lawmakers are hoping that by encouraging property owners to take meaningful steps to improve their properties and lower their risk of loss in the case of a disaster, insurance companies will see the state as a place where they can do business and will return again.

Aiming to solve the loss problem

“Our bill is a clever way to solve this problem: it incentivizes disaster resiliency, which will in turn bring insurers back to the marketplace,” explained Huffman.

The bill proposes that grants worth $10,000 be issued to property owners to help pay for resiliency work.  The grants would be managed through the Federal Emergency Management Agency.  Furthermore, 30 percent tax breaks would also be issued in order to support larger property owners as they prepare their own properties through various hardening techniques such as the use of fireproof building materials and the creation of defensible space.

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