California bill would make fossil fuel companies help pay for rising insurance costs
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A bill that would make oil and gas companies pay for rising insurance costs due to climate-related disasters was introduced this week in the Legislature.SB 982, the Affordable Insurance Recovery Act, would authorize California’s attorney general to file civil litigation against fossil fuel companies to recover losses from climate-induced disasters experienced by policyholders and the state’s insurer of last resort.California home insurance premiums have been rising by double-digit rates following a series of devastating wildfires across the state over the last decade.
The Jan.7, 2025, Eaton and Palisades fires alone are expected to result in up to $45 billion in insured damages.
Business Insurance Commissioner Ricardo Lara adopted an administrative law judge’s recommendation Tuesday and granted State Farm General, the state’s largest home insurer, a 17% emergency hike in its homeowners insurance rates.“With California’s paying such a massive cost for climate-related disasters, we have to ask who is not paying?” Sen.Scott Wiener (D-San Francisco) said at a Thursday press conference held outside the state Capitol.“We know who is — the survivors, taxpayers, policyholders, whose rates are going up throughout the state.
But the answer in terms of who is not paying is fossil fuel corporations,” said Wiener, the bill’s lead author.The recovered funds would compensate policyholders for rising premiums and other expenses, including the cost of fire-proofing their properties.The California Fair Plan Assn.
would be eligible for compensation, too.The insurer of last resort, operated and backed by the state’s licensed home insurers, has seen its rolls skyrocket as member insurers have dropped policyholders in wildfire-prone neighborhoods.The plan expects to pay some $4 billion for claims stemming from the Jan.
7 wildfires and has had to assess member insurers ...