Nearly six months after devastating firestorms swept through Los Angeles, California lawmakers are urgently working on new legislation aimed at safeguarding the state’s insurance program designed for high-risk homes.
The proposed bill, known as AB 226, is being championed by Assemblymembers Lisa Calderon (D-Whittier) and David A. Alvarez (D-San Diego).
This measure seeks to enable the state-backed California Infrastructure and Economic Development Bank to extend loans and bonds to the FAIR Plan, California’s insurer of last resort.
The goal is to prevent financial collapse of this crucial program following the excessive claims submitted as a result of recent disasters.
Alvarez had initially introduced this concept last year; however, it failed to secure enough progress.
Despite enjoying unanimous approval in the Assembly, the bill never reached the Senate for a vote before the conclusion of the 2024 legislative session.
Had the measure been enacted last year, it could have provided the FAIR Plan with greater flexibility during the onslaught of claims subsequent to the January firestorms, said Alvarez.
Instead, the FAIR Plan was compelled to impose a total assessment of $1 billion on insurers providing homeowners policies in California.
Insurance companies are now preparing to raise rates for homeowners through monthly surcharges to recover these costs.
“Had they had this option available to them … they would not be having to hit consumers with price increases on the private market now,” noted Alvarez.
AB 226 represents one of numerous wildfire-related pieces of legislation making their way through the state’s slow legislative process.
If passed, these measures aim to shield homeowners from price gouging following disasters, streamline claims filing for lost property, and enhance financial protections for those affected by calamities.
In January, lawmakers and Governor Gavin Newsom approved $2.5 billion in wildfire aid after the Palisades and Eaton fires resulted in more than two dozen fatalities and marked themselves as the second and third most destructive fires in the state.
Legislative leaders at that time expressed the need for a swift, bipartisan response to the disaster.
“Tens of thousands of our neighbors, our families and friends, they need help. This means that we need to be able to move with urgency, put aside our differences, and be laser-focused on delivering the financial resources, delivering the boots on the ground that are needed and the policy relief that is needed to get neighborhoods cleaned up and communities rebuilt,” remarked Senate President Pro Tem Mike McGuire (D-Healdsburg).
The FAIR Plan serves as a last-resort option for properties classified as high-risk and uninsurable by private insurers.
A recent analysis showed that between 2020 and 2024, the number of homes insured under the FAIR Plan in the fire zones of Eaton and Palisades nearly doubled, making it one of California’s largest insurers.
Legislators and advocates for insurance reform have repeatedly highlighted the need for stronger safety nets—like those proposed in AB 226—to ensure the FAIR Plan remains solvent in emergencies and evolves as a sustainable solution to California’s home insurance crisis.
Joining Alvarez in sponsoring the bill this year is Calderon, who chairs the Assembly’s insurance committee.
The bill successfully passed through the Assembly in early March, although it has yet to be considered by the Senate.
Alvarez praised the quick passage through the Assembly and expressed hope that the Senate would act similarly.
“God forbid, if it has to be used because of a devastating fire this summer,” he stated.
In addition to AB 226, several other major wildfire-related bills are under consideration by lawmakers.
AB 493, introduced by Assemblymember John Harabedian (D-Pasadena), proposes that lenders be required to pay interest on disaster insurance payouts held in escrow, rectifying a gap in existing law.
Another bill, AB 597, also authored by Harabedian, focuses on preventing public insurance adjusters from price-gouging homeowners after natural disasters or states of emergency.
State Senator Benjamin Allen has introduced SB 495, which aims to eliminate the requirement for policyholders to submit an itemized list of personal property losses during states of emergency and mandates insurers to grant extensions for reconstruction delays.
This bill has recently passed a Senate floor vote and is now headed to the Assembly.
While the pending legislation may not directly benefit survivors of the Palisades and Eaton fires, its passage is crucial to the broader rebuilding efforts, according to Maryam Zar, former president of the Pacific Palisades Community Council and founder of the Palisades Recovery Coalition.
Zar stated that the new laws will assist in preventing and preparing for future fires while also representing goodwill towards the enduring hardships of affected communities.
Several fire relief measures focus on simplifying the permit process for rebuilding.
Others aim to extend Governor Newsom’s emergency provisions, such as easing tenancy rights for individuals in temporary housing for over 30 days, accelerating permit approval timelines, and providing mortgage forbearance for properties destroyed for up to a year post-disaster.
Additionally, some proposals address staffing shortages within the California Department of Forestry and Fire Protection as fire season evolves into a year-round threat.
“Wildfire survivors continue to face housing insecurity, financial strain, and emotional trauma long after the immediate danger has passed,” stated Los Angeles County Supervisor Lindsey Horvath.
“These State bills represent a commitment to meeting people where they are—actively in recovery, rebuilding their lives, and in need of our long-term support.”
image source from：https://www.latimes.com/california/story/2025-06-05/fire-relief-bill-wrapup
