By Stephen Hobbs, SACRAMENTO BEE

https://www.sacbee.com/news/politics-government/capitol-alert/article286759155.html

In 2022, state Insurance Commissioner Ricardo Lara announced he would force companies to offer discounts to people who take specific steps to protect their homes from wildfires.

It was part of an effort, he said at the time, to “reward the hard work that California consumers do” to make their properties, families and communities safer.

Many homeowners will qualify, but their financial reward? Not much.

A year and a half later, the mandate has not led to significant savings for many Californians or provided a strong cash incentive to do the work, according to records and interviews.

Discounts proposed by some of the largest insurers in the state have yet to go into effect. But based on what companies have put forward, the cost of qualifying for them will dwarf the savings for many homeowners.

“People can spend hundreds or thousands of dollars protecting their homes against wildfires because they were told if they did that they would get lower insurance premiums,” said Harvey Rosenfield, the founder of Consumer Watchdog, an advocacy organization. “But so far, that has turned out to be a ‘heads, insurance companies win, tails, insurance companies lose,’ deal.”

Take Farmers, which was California’s second largest home insurer in 2022, the most recent year available, according to the Department of Insurance.

The company estimated the average policyholder in an area with a high fire risk would save about $42 to $75 a year for taking the specific mitigation steps, according to a document obtained by The Sacramento Bee.

“That’s a drop in the bucket,” said Hans Shillinger, who lives near Nevada City. Shillinger said he pays about $7,200 a year for his home insurance with Farmers.

What’s more, the company wants Shillinger and other policyholders to pay for an inspection to determine what, if any, discounts they are eligible for, another document shows. The company said the evaluations would need to be renewed every three years. It costs $125 to apply for the review.

That means the savings could roughly equal what a homeowner has to pay to even qualify for the discount.

Farmers argued homeowners “must have a vested interest in taking the necessary wildfire mitigation actions for their property,” in a filing with the state.

If the company was to pay for the inspection, it added, people could request one without having actually done the work and hope for the best. “In this scenario, the overall inspection costs could get out of control for an insurer.”

The department told Farmers that it, and not policyholders, should pay for the cost of an inspection used to determine eligibility for the mandatory discounts. The company’s proposal is still under review.

Michael Soller, a department spokesman, said the discounts send a clear message about the need for wildfire safety and provide direction on what steps to take. He encouraged homeowners to check with their insurers to see what they are eligible for.

Beyond paying less, he added, people who protect their homes could be saving their properties and lives during a future fire.

“This is long overdue and this is a really important first step.” The department plans to track how the discounts are used, he said, and could add additional ones in the future.

“We expect this to have an impact on day one but also for years to come.”