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Legislation to Bring Insurance Companies Back to California

Bay Area congressional representatives have introduced bipartisan legislation to address the ongoing insurance crisis in California. The Disaster Resiliency and Coverage Act proposes measures to encourage homeowners to enhance their properties' resilience against natural disasters aiming to draw insurance companies back to California. [1][2]

Key provisions of the legislation include:

Grant Program: A grant program administered through state governments, providing up to $10,000 to individual households in designated disaster-prone regions to fund specified disaster resiliency work on their homes. [1]

Tax Incentives: Tax incentives, including a 30% deduction on resiliency costs, for larger property owners who fortify their properties against fire and other disaster threats. [2]

The legislation aims to reduce insurers' losses by financially rewarding property owners for improving their homes' emergency preparedness. This, in turn, is intended to encourage insurance companies that have withdrawn from the California market due to wildfire and flood risks to return and provide more affordable coverage options for homeowners. [1][2]

The insurance crisis in California has led to a significant reduction in the available policies, with major carriers covering only 40% of the state's policies. Other insurers have also limited coverage or raised premiums, leaving many homeowners without affordable options. [1]

The lack of insurance coverage poses a significant risk to homeowners, as it is estimated that uninsured properties in California could lose approximately 12% of their value. For example, the city of Rohnert Park is projected to lose over $800 million in property value if homeowners cannot secure insurance coverage. [1]

By incentivizing disaster resilience and providing financial support to homeowners, the Disaster Resiliency and Coverage Act aims to address the insurance crisis and bring insurers back to the California market, ultimately benefiting both homeowners and the state's economy. [1][2]