admin
The California Earthquake Authority just handed Gov. Gavin Newsom and the Legislature a report that should get every homeowner’s attention. The SB 254 “Natural Catastrophe Resilience” study says the surest way to make earthquake insurance cheaper is to lower the actual risk — through retrofits, community mitigation and smarter pricing tied to verified repairs. In plain language: fix the houses and the bills will fall.
What the SB 254 study actually says
Big agency, big problems, practical ideas
The study comes from the California Earthquake Authority, which now insures nearly one million homes and says it has about $20 billion of claim‑paying capacity. The CEA lays out three policy paths: cut risk at the home and community level, rethink how catastrophe costs are shared, and consider state roles in financing big shocks. It also points out the obvious — only about 10–13% of Californians buy standalone earthquake insurance, so the current system leaves most families exposed.
Why this matters to homeowners and taxpayers
Right now earthquake insurance is expensive because risk is high and take‑up is low. The SB 254 study recommends clearer, larger premium discounts for real, verified retrofits — CEA already offers discounts up to roughly 25% for qualifying work — and argues we should scale grants and financing so more people can afford those retrofits. That is common sense: more bolted foundations and braced cripple walls mean fewer massive claims, which should translate into lower premiums and smaller deductibles.
Good ideas — and where Democrats in Sacramento might mess this up
There is a conservative playbook here that should be popular across the aisle: use targeted incentives, cut red tape, and let private insurers and reinsurers bear market risk where possible. What we must resist is the instinct to paper over problems with open‑ended state backstops that reward doing nothing. State reinsurance or guarantees can help stabilize markets, but they also create moral hazard if homeowners and local governments don’t actually reduce risk. The SB 254 study rightly notes the up‑front cost and contractor bottlenecks for retrofits — which means any program must be practical, fast, and focused on results.
What should happen next
Lawmakers should act on the study but do it the right way. Fund larger, targeted retrofit grants and low‑cost loans. Tie premium discounts to fast, verifiable inspections so homeowners actually see savings. Encourage public‑private reinsurance plans that limit taxpayer exposure while unlocking private capital. And yes, hold Governor Gavin Newsom, Insurance Commissioner Ricardo Lara and CEA CEO Tom Welsh to account for getting programs out the door and off the promise list. If Sacramento wants cheaper earthquake insurance, it should stop writing checks and start helping people bolt their houses to the ground.
