Sacramento - California lawmakers are working on legislation to try to protect state insurance plans for high-risk homes from financial collapses nearly six months after they are destroying fire communities in Los Angeles.
AB 226's bill, sponsored by conference themes Lisa Calderon (D-Whittier) and David A. Alvarez (D-San Diego), will enable the state's last resort, Fair Plan, to qualify for loans and bonds, and to obtain losses from state-backed California Infrastructure and Economic Development Bank for losses caused by the currency.
Alvarez proposed the measure last year but failed. Despite unanimous support in parliament, the bill never reached the Senate vote before the end of the 2024 legislative session.
Alvarez said if the measure was passed last year and had been signed into law by the governor, the fair plan would have greater flexibility to make a large number of claims after the fire in January.
Instead, the fair plan was forced to conduct an additional $1 billion in the total assessment of insurers that offer homeowners’ policies in California. To compensate for these expenses, insurance companies are expected to raise tax rates for homeowners through monthly surcharges.
"If they can use this option … they don't have to hit consumers right now as prices in the private market rise," Alvarez said.
AB 226 is one of many wildfire-related bills, but is still gradually over the course of the slow legislative process. If laws are passed, these measures will protect homeowners from post-disaster price fraud, simplify the process of making claims for lost property and provide financial protection for disaster victims.
Legislator and Gov. Gavin Newsom approved $2.5 billion in wildfire aid in January as Palisades and Eaton Fire killed more than two dozen people and became the second and third largest fires in state history. The legislative leaders at the time expressed a quick, bipartisan approach to disaster.
“This means we need to be able to act urgently, put our differences aside, and provide financial resources with lasers to provide the boots needed, and with lasers to provide the policies needed, as well as policy relief needed to rebuild the community and the community and pass the Saide tem tem tem mcguire (pro),”
California’s last home insurance company equity plan is a backup of properties that private companies consider high risk and uninsurable. A Times analysis found that the number of homes in the Eaton and Palisades fire zones nearly doubled between 2020 and 2024, and the plan has become one of the largest insurers in the state.
In lawsuits accusing a collusion between private insurers and fair plans, policy holders are concerned about delays in payments and smoke damage investigations, lawmakers and insurance advocates repeatedly call for better safety nets, such as those proposed in AB 226, to enable emerging insurers to seek jobs at emerging insurers and effectively serve as a long-term solution to the state’s home insurance problem.
This year, Calderon, chairman of the General Assembly Insurance Committee, joined Alvarez. It passed the conference in early March, but has not seen the first Senate committee yet.
He said Alvarez celebrated the rapid passage of the bill in Parliament, hoping that the Senate would do the same: “God forbids it if it must be used because of the devastating fire this summer,” he said.
Other major wildfire bills that lawmakers consider include:
Maryam Zar, honorary president of the Pacific Palisades community committee and founder of Palisades Recovery Coalition, said most pending legislation does not directly support survivors of the Palisades and Eaton fires, but remains important to the reconstruction process.
She said the new law will help prevent and prepare for future fires and show goodwill to communities that are still suffering.
Some other fire protection measures focus on relaxing the reconstruction permit process, while others extend the rules set by Newsom during a state of emergency - reducing the lease rights of people who stay in temporary housing for more than 30 days, thereby shortening the permit approval timeline and ensuring that mortgages will be destroyed for up to one year after the disaster. Others want to address staffing issues in California’s forestry and fire departments as the fire season becomes a year-round threat.
“Wildfire survivors have long been facing housing insecurity, financial stress and emotional trauma in direct danger,” Los Angeles County Supervisor Lindsey Horvath said in a statement. “These national bills represent a commitment to meet with the people they are – actively recovering, rebuilding their lives and the need for our long-term support.”