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California state Senator Sasha Renée Pérez introduced legislation Wednesday that would compel insurance companies to offer and renew homeowners insurance to properties meeting state-defined wildfire safety standards. Senate Bill 1076, dubbed the Insurance Coverage for Fire-Safe Homes Act, aims to address a growing crisis in California where homeowners are increasingly unable to secure or maintain insurance coverage due to wildfire risk.
The bill, co-sponsored by the Eaton Fire Survivors Network and Consumer Watchdog, would require insurers to provide coverage for homes that adhere to home hardening and defensible space requirements established by the state’s Insurance Commissioner, Ricardo Lara. Starting January 1, 2028, insurers failing to comply could face a five-year ban from offering both auto and home insurance within California, according to the legislation.
Senator Pérez, a Democrat representing Alhambra, highlighted the plight of residents rebuilding after the January 2025 Eaton Fire, stating that many fear being denied insurance despite constructing homes to the highest safety standards. “To aid fire survivors return home, we need assurance that newly built, wildfire-resilient homes will receive insurance coverage,” Pérez said in a statement. “Being denied coverage after meeting safety standards sends the wrong message and is akin to being penalized for doing the right thing.”
The legislation comes after a similar bill failed to pass the Legislature in 2023. However, proponents believe the current environment, marked by escalating insurance cancellations and a surge in enrollment in the California FAIR Plan – the state’s insurer of last resort – increases the likelihood of success. The FAIR Plan has seen enrollment double in the last two years, with hundreds of thousands of homeowners losing coverage from traditional insurers, according to Consumer Watchdog.
Recent lawsuits filed by policyholders in the Eaton and Palisades burn areas against the FAIR Plan over smoke-damage claims, along with a Department of Insurance investigation into the insurer’s claims practices, further underscore the urgency of the issue, advocates say. Carmen Balber, executive director of Consumer Watchdog, stated, “The situation on the ground for consumers is so much worse, and that’s why this bill should get serious consideration in the Legislature.”
The Personal Insurance Federation of California, representing major property and casualty insurers, immediately criticized the bill. Rex Frazier, president of the group, argued that the mandate would force insurers to lose money or leave the state. “The bill would require insurers to lose money in California’s high fire risk areas or else be kicked out of the state. The obvious result is that it would push insurers out of the homeowners insurance market and, not to be outdone, also create an auto insurance crisis,” Frazier said.
The American Property and Casualty Insurance Assn. Echoed these concerns, warning that the bill could exacerbate existing market challenges. Mark Sektnan, vice president for state government relations, stated, “It’s critical that policymakers proceed with caution before layering new mandates onto an already strained system, which would only deepen market challenges facing consumers.”
The proposed legislation builds upon the state’s Safer from Wildfires program, established in 2021, which offers homeowners discounts for implementing mitigation measures such as installing fire-resistant roofing and creating ember-resistant zones around homes. While Pérez’s bill would establish specific standards through the Insurance Commissioner, Balber anticipates the Safer from Wildfires program will serve as a key reference point.
SB 1076 is the third insurance-related bill introduced this year by Senator Pérez, in collaboration with the Eaton Fire Survivors Network and Consumer Watchdog. SB 877 seeks greater transparency in the claims process, while SB 878 would penalize insurers for delayed claims payments. Neither of those bills has yet been considered by a legislative committee.
