Consumer Watchdog Submits Recommendations to CEA for Governor’s Resiliency Report
Los Angeles, CA – California should hold the industries responsible for fueling climate change, causing wildfires and withholding insurance benefits accountable for the costs of disaster recovery and prevention, Consumer Watchdog wrote in recommendations submitted for the Governor’s study on catastrophe resilience and recovery.
The group warned that insurance and utility ratepayers are already financially overburdened and argued utility, insurance and fossil fuel companies should bear their fair share of the cost of climate change-driven weather disasters.
“Utility and insurance consumers with the least capacity to pay are bearing a disproportionate share of these costs in the form of rising bills, loss of coverage, and, too often, delay or denial of insurance benefits they are owed,” wrote Carmen Balber for Consumer Watchdog. “Nearly nine in ten Californians are worried they will not be able to get, or afford, insurance. 82% of voters are concerned about the high cost of their electricity bills. Responsible parties should pay the price for increasing climate costs. We also cannot rate hike our way out of the climate crisis. To reduce costs California must reduce the risk of loss.”
Consumer Watchdog’s recommendations include:
- Guaranteed insurance coverage for fire-safe homes.
- Making fossil fuel companies contribute to climate resilience and recovery.
- Strengthening insurance policyholder protections so insurers pay what they owe survivors.
- Preserving the legal rights of survivors to hold responsible parties accountable.
- Requiring utility shareholders, not the Wildfire Fund, to pay if the utility did not meet the highest standard of care.
- And imposing affordability measures on the investor-owned utilities such as limiting return on capital costs, which has the potential to save $6 billion per year.
Download Consumer Watchdog’s comments here.
SB 254 extended the Wildfire Fund, and charged the California Earthquake Authority with producing a report on future catastrophe resiliency options. The Fund, created to relieve utility liability for wildfires they cause, was replenished with another 10-year, $18 billion commitment by ratepayers and shareholders even as it became clear that Southern California Edison’s negligence was likely responsible for causing the Eaton Fire.
“Edison is the poster child for the failure of this approach,” wrote Consumer Watchdog. “Because Edison claims to have followed [PUC] regulation, it can access the wildfire fund, despite its negligence in not shutting down the high voltage line in conditions that warranted it, and not taking down the “ghost line,” that likely caused the fire. Shareholders need to pay under such circumstances.”
Insurance is the foundation of recovery efforts, yet FAIR Plan enrollment nearly doubled over the past two years and access to affordable insurance is an ongoing crisis, wrote the group.
“Even homeowners whose homes meet the highest fire-safety standards are still arbitrarily denied coverage, nonrenewed, or face premium hikes that do not reflect their risk reduction efforts. This has destabilized California’s homeowners insurance market. Real estate sales have suffered in turn.
“Requiring insurance companies to cover Californians who make their homes fire-safe is the number one action the state can take to increase resilience in our neighborhoods, reduce costs and expand Californians’ access to insurance.”
