California's Proposed Rules for Property Insurance and Climate Change Risk: What You Need to Know

California Insurance Commissioner Ricardo Lara plans to write new rules for property insurance companies in an effort to persuade them to continue doing business in the state. The proposed rules would allow insurers to consider climate change when setting rates and potentially factor in some reinsurance costs. However, insurance companies would still need permission from the state to raise their rates. The goal is to encourage insurers to write more policies for homeowners in wildfire-prone areas, with a requirement of at least 85% of their statewide market share. The rules could potentially increase competition and help control rate increases. The process of finalizing the rules is expected to be completed by December 2024.