Arizona lawmakers are debating a bill that would protect utilities from wildfire-related litigation, a move that could trigger a shock wave in the insurance industry.
The bill would be difficult to prove that wildfires should be attributed to utilities, which limits damages due to equipment failure or poor maintenance. In exchange for reduced liability, utilities will need to submit plans every two years to detail the steps they have taken to limit the risk of wildfires.
The bill currently written does not actually require utilities to comply with these plans. If the utility does not follow its plan or negligence in maintaining the equipment, it can still be protected from claims.
The insurance industry has been standing out among wildfires, and the bill could have unexpected results that would shift the burden of wildfire claims to homeowners’ insurance companies.
“There is no free lunch,” insurance company lobbyist Marcus Osborn, explain At a public hearing. “You either have to pay higher insurance premiums or higher utility fees.”
Some homeowners in Arizona have See their rate triple The coverage for others has dropped this year.
This is largely due to the result of insurance companies trying to bear the losses when wildfire claims pile up. Hippo is an insurance startup that was released through SPAC in 2021 $42 million in loss Due to the recent Los Angeles wildfires. Lemonade, another startup Public In 2020, it is expected to lose $45 million From the same disaster.
The compound risk of wildfires provides openings for other startups. For example, kettles are sold for reinsurance and models may produce wildfire results to help other companies support their wildfire risks. Still, the overall trend is higher costs for homeowners.
The Arizona bill is considered the threat and consequences of nations across the western United States to address the threat and consequences of wildfires that have been worsened by climate change and fire extinguishing for more than a century.
For decades, fires in the United States have been put out as soon as possible. Previously, low-intensity fires would pass through the forest, killing weak saplings and converting dry leaf waste into soil fertilizer for fertilizer. But as the fire was suppressed, layers of bushes and years of leaf waste became dense.
These conditions create what wildfire experts call “ladder fuels” that help burn low-intensity fires from forest floors into the canopy where they can turn into catastrophic fuels.
Against this backdrop, climate change has been aggravating the risk of high-intensity canopy fires. according to A study By increasing evaporation, it was published in November. In other words, there is almost no precipitation that falls on the ground and falls back into the atmosphere faster than before, resulting in drier conditions.
Warm winters are also blamed for the culprit. Lower snow causes dryness in spring, and insect populations are often checked for cold and cold temperatures. For example, the higher temperature and greedy pine beetle Killed more than 100 million trees In California between 2014 and 2017. These dead trees became the ideal fuel for driving wildfires in the following years.
