California will become the first state in the nation to require insurance premium discounts for owners of homes and businesses that are made safer from wildfires.

New rules mandate that insurance companies reward consumers who take wildfire safety and mitigation actions under the state’s Safer from Wildfires framework, the Department of Insurance announced Monday. The framework includes a list of expert-recommended actions home and business owners can take to better protect themselves from fires.

The regulation is largely a response to skyrocketing insurance costs for residents in wildfire-prone areas, Insurance Commissioner Ricardo Lara said. Currently, fewer than half the insurance companies doing business in California provide such discounts.

“Protecting Californians from deadly wildfires means everyone doing their part, including insurance companies by rewarding consumers for being safer from wildfires,” Lara said in a statement.

The regulation arrives as residents grapple with larger, faster-moving and more frequent fires fueled by climate change. Fifteen of the state’s 20 most destructive wildfires on record have occurred since 2015, according to the California Department of Forestry and Fire protection, and entire towns have been leveled by flames.

Yet, ratepayers in recent years have complained that companies have been unwilling to credit them for steps taken to lower the risk of loss and damage, such as clearing combustible vegetation from properties or installing fire-resistant roofs.

In a 2020 hearing on the matter, dozens of people told the Department of Insurance that their rates had become untenable, with some seeing quotes of as much as $20,000 a year.

Under the new rules, insurance companies will have 180 days to submit new rate filings that incorporate the wildfire safety standards and establish a process for releasing wildfire risk determinations to residents and businesses, Lara said.

The companies must also provide consumers with their property’s “wildfire risk score” and create a right to appeal that score.

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