As Gov. Gavin Newsom prepares to release his May budget revision, with an estimated surplus of $68 billion, Assemblymember Marc Levine (D – Marin County) announced a $10 billion budget request on Monday, including $5 billion to incentivize home hardening in high wildfire risk areas and another $5 billion to establish a state Catastrophic Wildfire Reinsurance Fund. These two requests are critical for preparing for and responding to the year-round wildfire threat that threatens families and homes throughout California.
The climate crisis has reshaped California’s approach to wildfire prevention and mitigation efforts, which are required to prevent widespread loss of life and property.
Because of California’s resilient economy, the current estimated budget surplus presents a number of opportunities to make long-term investments and prevent future wildfire destruction.
Homeowners, particularly those in rural or suburban areas, urgently need to increase defensible space around their homes to reduce their own risk of wildfire.
A homeowner who invests in scientifically proven home hardening has a better chance of surviving a wildfire than a homeowner who does not. Home hardening on a large scale is an essential tool for reducing wildfire-caused losses now and in the future.
Levine’s $5 billion budget request will incentivize science-based home hardening by providing homeowners with grants of up to $10,000 to reduce wildfire risk and the potential spread of wildfires in high-risk fire zones throughout California.
Due to increased wildfire risks in California, insurance companies have been canceling or non-renewing insurance policies, raising premiums, or threatening insolvency for several years.
Levine’s additional $5 billion request would create the Catastrophic Wildfire Reinsurance Fund, a state-managed reinsurance program that would provide insurers with a consistent and ongoing source of reimbursement for catastrophic wildfire losses.
Based on Levine’s legislation, AB 1522 (2022), this fund will be the last line of insurance protection, covering all insured losses over a certain amount that occur during the annual wildfire season.
No insurer or financial entity will be willing to assume wildfire liability risks in the future unless the state of California can provide a framework and structure to limit exposure and bring stability and predictability to the California property insurance market. Levine’s $5 billion request will help to stabilize the insurance market and expand access to comprehensive, affordable property insurance.
“As California wildfires become hotter, faster, and more devastating, we must do more than the bare minimum,” Assemblymember Marc Levine said. “We must leverage our state’s economic health to make long-term investments that reduce homeowner risk of wildfire loss and help to stabilize the insurance market. This $10 billion investment is a necessary first step toward addressing the climate crisis and the devastating economic impacts of wildfires in California, and it should be included in the 2022-23 Budget Act.”
Levine’s budget request will be considered as part of the state budget for 2022-23.