State Sen. Bill Dodd, D-Napa, said his bill would function like homeowner’s insurance for the state, allowing it to pay an annual premium for coverage for an emergency response during disaster events.
The bill does not spell out which state agencies would be covered under such a policy. But one prime example would be Cal Fire, which has exhausted its emergency fund allocation in seven out of the last 10 years, given the uptick of massive wildfires such as the 2017 North Bay fires and the 2018 Camp fire in Paradise.
The state spent $947 million in the 2017-18 budget year for the emergency firefighting fund, which was more than $450 million more than originally budgeted.
“That’s a lot of money, and doesn’t even include the billions we have spent on recovery,” Dodd said during a Sacramento press conference.
The bill, if approved by the Legislature and signed by the governor, would enable the state’s insurance commissioner and treasurer and Gov. Gavin Newsom to negotiate with insurance companies for coverage that would kick in when California incurs unexpected emergency costs for disaster responses.
“Generally, they will insure anything for a price,” Dodd said of insurance companies.
State Insurance Commissioner Ricardo Lara said there has been preliminary discussions with insurers on crafting such a policy.
“There is an interest there,” Lara said. “If the premiums are too high, we can walk away.”
The Federal Emergency Management Agency has reimbursed the state for past disaster responses, but payments typically come much later after the disaster event and are not fully reimbursed, Lara said.
The bill would provide lawmakers who draft the state budget more predictability, Dodd said.
Both FEMA and the state of Oregon have such insurance policies to protect their budgets. Oregon has paid $61 million in premiums and received $102 million in insurance payouts over an almost 40-year period. Like California, the state has had an increase in the severity and frequency of wildfires.
You can reach Staff Writer Bill Swindell at 707-521-5223 or bill.swindell@pressdemocrat.com. On Twitter @BillSwindell.
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