CSAC joined local government organizations, RCRC and CalCities,
in submitting comments to the California Department of Insurance
on newly released draft rules, “Catastrophe
Modeling and Ratemaking: Insurer Commitments to Increase Writing
of Policies in High Risk Wildfire Areas.” In an effort to
address the state’s insurance crisis, particularly in areas of
high wildfire risk, the draft rules propose requiring insurers
using catastrophic modeling to commit to writing a specified
percentage of insurance policies in these high risk areas for a
set period of time. Insurers will be allowed to use catastrophic
modeling to factor in historic wildfire catastrophes when setting
insurance rates.
The draft regulations further identify high risk areas across the
state as “distressed”, which include counties and undermarketed
zip codes. The initial list of distressed counties can be
found
here.
The following concerns are outlined in the written comments:
Identifying distressed counties does not ensure that at-risk
communities will receive increased coverage availability and
affordability statewide.
Modeling and ratemaking processes must remain transparent to
keep property owners informed.
Community-wide and parcel-level wildfire mitigations must
also be considered during the ratemaking process.
