Insurance: distressed areas

The law ties the state’s review of hard-to-insure areas to updated wildland-urban interface maps and public input. It also strengthens enforcement of insurers’ residential fire-risk reporting duties.

What the law does ​

• Requires the Department of Insurance to review and update distressed areas by July 1, 2027, and annually thereafter, using updated wildland-urban interface designations.
• Requires consultation with the Department of Forestry and Fire Protection on wildfire hazards and wildland-urban interface designations.
• Requires analysis of wildland-urban interface ZIP Codes where 10%, 20%, or 30% of specified residential properties are insured through the California FAIR Plan.
• Requires at least one public meeting and public comment on a preliminary review report during each review period.
• Requires annual publication, beginning January 1, 2028, of review findings and a list of wildland-urban interface ZIP Codes, with reports sent to the Assembly and Senate insurance committees.
• Allows biennial reports if the share of homes in wildland-urban interface areas on the FAIR Plan or uninsured falls by at least 20% from the prior year.
• Raises late-report penalties for admitted insurers to up to $5,000 per 30-day period, or up to $10,000 per 30-day period for willful violations, capped at $100,000.
• Allows the Insurance Commissioner to use reporting violations as a basis for other authorized enforcement action.

Who it affects ​

• Homeowners and communities in wildfire-prone wildland-urban interface areas.
• California FAIR Plan policyholders and residential property insurance applicants in distressed areas.
• Admitted insurers required to submit residential fire-risk information to the Insurance Commissioner.

Context ​

The California FAIR Plan provides basic property insurance for people unable to obtain coverage through normal insurance channels.