HB 25-1182

House Bill 25-1182, also known as the "Risk Model Use in Property Insurance Policies," requires property insurance companies that use wildfire risk models or other scoring methods to share information with regulators and the public. These insurers must include specific factors in their models and provide discounts to policyholders who take steps to reduce fire risks on their properties. The bill also mandates that insurance companies post details about premium savings for such mitigation efforts on their websites and send annual notices to policyholders explaining how wildfire risk scores affect their premiums. Since the bill has been signed, it is now law and insurance companies must comply with its requirements.

Official Summary

The act requires a property insurer that uses a wildfire risk model, a catastrophe model, or a scoring method to assign risk to: For the purposes of underwriting homeowners and other property insurance policies, adhere to specific requirements to share information with the commissioner of insurance (commissioner) and the public, include specific activities in the models, and provide notices to policyholders; Submit available data concerning the models and scoring method as required by rule of the commissioner to the division of insurance as part of the insurer's rate filings; and Ensure that specific factors are either incorporated in the wildfire risk model, catastrophe model, or combination of models or are otherwise demonstrably included in the insurer's underwriting and pricing. If an insurer does not incorporate property-specific and community-level mitigation actions into its models, the act requires the insurer to provide discounts to policyholders who demonstrate actions taken on the property to reduce the risk of loss. The act requires an insurer to post on its website information regarding premium savings that are available to policyholders who undertake property-specific mitigation actions or provide evidence of community-level mitigation actions and the process for appealing a wildfire risk score. The act requires an insurer that provides a mitigation discount or that uses a wildfire risk model or risk score to underwrite, nonrenew, price, create a rate differential, or surcharge the premium based upon the policyholder's or applicant's wildfire risk to provide an annual written notice to each policyholder or applicant for property insurance of the applicable mitigation discounts, the wildfire risk score, and any other wildfire risk classification used by the insurer to underwrite the policyholder's or applicant's wildfire risk. The insurer is required to provide the wildfire risk score or classification to the policyholder or applicant. The act authorizes the policyholder and applicant to appeal the score or classification directly to the insurer. The act authorizes the commissioner to adopt rules. (Note: This summary applies to this bill as enacted.)

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