The bill, also called the Affordable Insurance and Recovery Act,<\/a> would empower California\u2019s attorney general to sue fossil fuel companies over climate damages in an effort to shore up insurance.<\/p>\n Amid destructive wildfires, insurance companies have retreated from California in large numbers and increased policy costs significantly, according to advocates and experts.<\/a><\/p>\n The new bill, introduced by Democratic state Sen. Scott Wiener of San Francisco, would have Big Oil companies pay up for the ways fossil fuels have historically contributed to the global warming that is driving conditions for deadly wildfires, more powerful storms and other weather extremes.<\/p>\n \u201cThat money would go into bailing out the FAIR Plan after a disaster,\u201d Creasman said, referring to the California program<\/a> that acts as an \u201cinsurer of last resort.\u201d\u00a0<\/p>\n That would \u201ckeep rates lower for folks recovering after a disaster,\u201d she said.<\/p>\n The bill would create a fund for any money fossil fuel companies pay as a result of lawsuits from the attorney general. In addition to shoring up the FAIR Plan, those funds would also go toward a grant program to help communities reinforce their homes to better withstand extreme weather and climate disasters. Traditional insurers will also have reason to stay or return to the state if the fund helps residents with \u201chome hardening,\u201d Creasman said.<\/p>\n She pointed to surveys that showed 66 percent of voters<\/a> across party lines demanded billion-dollar corporations be held responsible for the climate crisis and should provide money toward home insurance costs.<\/p>\n Industry groups countered Wednesday that the bill is too broad and would negatively impact the companies that provide fuel for the state\u2014by extension spiking costs for Californians. The companies also claim the bill is unconstitutional and say it will draw legal challenges.<\/p>\n SB 982, which was referred to the Senate\u2019s Insurance Committee, does not name any specific\u00a0 company. A draft of the bill says it would focus on companies with a market cap or worldwide annual revenue of $500 million that have been or are \u201cengaged in the extraction, production, manufacture, or sale at wholesale of covered fossil fuel products.\u201d<\/p>\n The State Building and Construction Trades Council of California, on behalf of more than 450,000 construction workers, urged state Senate leaders to \u201cstrongly oppose\u201d the bill.\u00a0<\/p>\n \u201cThere\u2019s a multitude of causes of climate change. I think everybody agrees on that and flip-flopping jurisprudence to say that a legal product is strictly liable for the entirety of climate change is just not responsible policy,\u201d said Erin Lehane, a spokeswoman for the labor union.\u00a0<\/p>\n \u201cWe believe it\u2019s exploiting a true crisis in California, the insurance crisis as well as the wildfires. The horrible personal tragedies that have come from these disasters,\u201d Lehane added. \u201cBut this is not the answer.\u201d<\/p>\n The Western States Petroleum Association, an industry trade group, also opposes the bill.<\/p>\n Fossil fuels are a major contributor to global warming. Democratic states are increasingly trying to make the industry pay<\/a> for some of the damage<\/a>\u2014even as Republican lawmakers seek to immunize companies from climate liability<\/a>.\u00a0<\/p>\n Insurance is the latest front in the battle. The author of the California bill said no other state has yet made fossil fuel companies pay for climate-driven insurance problems, but both Hawaii<\/a> and New York<\/a> are considering similar measures.\u00a0\u00a0<\/p>\n Climate disasters fueled by climate change, including larger and more destructive wildfires, floods and other extreme weather events, are \u201cexploding\u201d insurance costs, Wiener said in an interview Wednesday afternoon.\u00a0<\/p>\n \u201cInsurance premiums have gone through the roof,\u201d Wiener said. \u201cTo the point where people cannot afford to insure their homes.\u201d\u00a0<\/p>\n The state\u2019s FAIR Plan, which acts as a public safety net insurance program for people who can\u2019t get private insurance, has become unstable as a result, he said.<\/p>\n \u201cWhen we look at who pays the cost of climate-fueled disasters, it is the individuals who are harmed. It\u2019s taxpayers, and it\u2019s people having to pay higher insurance costs,\u201d Wiener said. \u201cAnd who\u2019s not paying? It\u2019s the corporations whose products cause climate change.\u201d\u00a0<\/p>\n This story is funded by readers like you.<\/p>\n Our nonprofit newsroom provides award-winning climate coverage free of charge and advertising. We rely on donations from readers like you to keep going. Please donate now to support our work.<\/p>\n Donate Now<\/a> <\/p>\n As of last September, California\u2019s FAIR plan was insuring almost $700 billion in property across the state\u2014a 52 percent increase from the year before and a 317 percent increase from 2021, California lawmakers reported in the new bill.\u00a0<\/p>\n In February 2025, the state\u2019s insurance commissioner approved a $1 billion FAIR Plan assessment on member insurers, the first such assessment in over 30 years. The FAIR Plan had just received nearly 3,700 claims for damages caused by the Palisades Fire and about 1,325 claims caused by the Eaton Fire.<\/p>\n Creasman, of California Environmental Voters,<\/a> highlighted the findings of a January poll<\/a> that more than 1 in 5 California homeowners are uninsured because of canceled policies and unaffordable premiums.<\/p>\n \u201cWe are on the front lines of what the world will be experiencing,\u201d said Creasman. \u201cOur insurance market is in crisis. The big core question at the center of this insurance crisis is who is going to pay for these climate disasters that are hugely expensive to recover from.\u201d\u00a0<\/p>\n A spokesperson for the FAIR plan said it has not taken a position on the bill. The state\u2019s largest private home insurance provider, State Farm, did not immediately respond to a request for comment.<\/p>\n Ben Collier, an associate professor of risk and insurance at the University of Wisconsin-Madison, said broader insurance problems linked to climate disasters and their aftermath have been well-documented and are heading to a boiling point.<\/p>\n \u201cInsurance affordability and availability has become a very big challenge in the last seven or eight years,\u201d Collier said Wednesday.<\/p>\n Insurance premiums have increased 28 percent on average nationwide since 2017, after adjusting for inflation, he said. It\u2019s even worse in higher-risk areas.\u00a0<\/p>\n \u201cAnd access to insurance has declined,\u201d he said. \u201cSome insurers have decided that they aren\u2019t willing to cover policy holders, especially in disaster-prone areas.\u201d<\/p>\n The problem became particularly acute in California following 2017 and 2018 wildfires, including the deadly Camp Fire<\/a>. There\u2019s been substantial development in areas most prone to growing climate and wildfire risks in the state, Collier noted.<\/p>\n \u201cThe stricter rules around how much insurers [charge] and what they can use to price risk in the state has reduced competition there, reduced supply of insurance,\u201d Collier added.<\/p>\n
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