New Insurance Model Engages Both Insurers and Homeowners


    As extreme weather becomes the new normal, the insurance industry has been thrown into chaos all over the country. No one is a winner. Insurers have outdated methods to calculate risk, which causes them to guesstimate rates and pull out of risky areas.
    In California, the largest market in the country, homeowners who are non-renewed can be forced to use California’s FAIR plan, the policy of last resort.
    Over the past two years, Insurance Commissioner Ricardo Lara of the CDI (California Department of Insurance) has been working to find a path to a fair, but robust market.
    Lara’s strategy is based on the fact that wildfire mitigation and home hardening of both individual homes and neighborhoods will help homes and neighborhoods survive a wildfire. Insurers are starting to look more closely at how homeowners and neighborhoods are managing their risk through mitigation. In addition to using satellite images and drones, they are starting to make in-person inspections.
    Recently, Joel Laucher of consumer advocacy group United Policyholders, gave a presentation to the Orinda Firewise Council. View the presentation here: He shared the new regulations the CDI is 
    No insurer shall use a rating plan or wildfire risk model that does not consider or take into account the following mandatory factors:

• Community-level mitigation efforts: The rating plan’s, or any wildfire risk model’s, output shall reflect the reduced wildfire risk resulting from community-level mitigation efforts.
• Property-level mitigation efforts: The rating plan or wildfire risk model output shall reflect the reduced wildfire risk resulting from property-level wildfire risk mitigation efforts undertaken with respect to an individual property being assessed for risk.

    The measures fit perfectly into the Firewise USA model but are also agreed upon by numerous organizations and groups like the Insurance Institute for Business and Home Safety (IBHS), United Policyholders, Cal Fire and 150 Fire Safe Councils in California.
    To make your home more likely to survive a wildfire and to maintain access to insurance coverage you can afford, these are the key steps:

• Class A fire rate roof
• Ember resistant vents
• A 5-foot home ignition zone cleared around your home
• A 6-inch noncombustible clearance at the base of the exterior of your home
• Get rid of combustible materials under decks
• Limb up branches on trees and bushes; get rid of dead brush and debris
• The last five feet of any fencing attached to a home must be of noncombustible materials
• If another combustible structure is within 25 feet of the dwelling, facing walls of dwelling must include tempered glass and noncombustible, fire rated cladding.

    Start with baby steps: clear the first five feet around your home, eliminate juniper and debris from your property and limb up your trees. If you are not in a Firewise group, you can still follow its program at Once you get started you might want to start a group of your own!

Melanie Light can be reached at

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