What Insurance Carriers Need to Know about California’s Safer from Wildfire Program

Allen Fricks, Senior Product Development & Compliance Consultant and Allison Ott, Product Development & Compliance Consultant

March 2nd 2023

Since 1950, the severity and frequency of California wildfires have increased. While the reasons for the increases can be debated, the threat to California’s property and public safety have risen as a result of the fires. The outbreaks in both 2018 and 2017 resulted in record breaking losses. In recent years, fire claims have grown to tens of billion dollars annually, with more than 70% coming from the last five years alone. To protect the community from these devastating wildfires, California politicians, particularly the Insurance Commissioner of California, have acted in several ways. There are new programs, such as, the “Safer from Wildfires” program and new regulations for the insurance industry to follow.

The Safer from Wildfires program is an interagency partnership between several government agencies and particularly the Insurance Commissioner, Ricardo Lara. This program is a multi-dimensional plan intended to protect the structure, immediate surroundings, and wider community. The framework of the model includes expert-recommended actions that home and business owners can implement to protect themselves from fires.

To incentivize communities and individuals to participate in the Safer from Wildfires program, California will be the first state to require property insurers to offer premium discounts for home and business owners that are executing the guidelines stated in the program.

To guide insurance companies on how to provide data, discounts and other items related to pricing for communities and other participates in the Safer from Wildfire program, Commissioner Lara along with the California Legislation worked together to pass California Code of Regulations § 2644.9. This code outlines the new compliance requirements that insurance companies must follow with regards to wildfire mitigation efforts by home and business owners. In addition to the required discounts, the Commissioner is also requiring various other conditions, including new rate filings, new rating plans and underwriting guidelines, and the review of any wildfire risk model used in ratings.

One of the required actions for an insurance carrier is that within 180 days of the enforcement date of October 17, 2022, all California insurance carriers must recognize, and reward efforts made by home and business owners to minimize losses. Personal and commercial property insurers must also submit new rate filings that include wildfire standards created by the California Department of Insurance (CDI). Moreover, the rate filing must be in accordance with the CDI’s Prior Approval Rating Filing Instructions. While there are several other requirements in the regulation and from the CDI, the general idea is that companies will need to give credit to home and business owners that can document action to minimize wildfire losses.
Part of the provisions under CCR § 2644.9 address the specific rating items that must be considered in the company’s rating plans and underwriting guidelines. For each requisite mitigation factor, property insurers are required to have separate discounts or credits. The Regulation does not preclude a company for offering optional factors in addition to the required ones.

Lastly, Commissioner Lara mandates that any wildfire risk model used in ratings be reviewed by the CDI. As a result, the approval time for rate filings of a property insurer adopting a new model that was not formerly reviewed may take longer than the average rate filings.

The reality of larger losses at a higher frequency is driving the Commissioner to put the wildfires at the forefront of his department’s diligent work. In doing so, the CDI along with other government agencies, have created a plan to reward the extra effort by Californians to minimize the risk from wildfires and the investment in their homes, businesses, and ultimately, their livelihood. The Safer from Wildfires framework and its supporting regulations enforce property insurance discounts to those participating in the program and is believed to serve as an incentive to participate.


Allen Fricks
Allen Fricks
Allison Ott
Allison Ott


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