With California communities facing increasing threats from increasingly exposed to climate change-related threats, Insurance Commissioner Ricardo Lara wrote the nation's first climate insurance law to protect consumers in the years ahead.

Senate Bill 30 (Chapter 614, Statutes of 2018) established a working group of environmental advocates, researchers, and insurance experts making recommendations for policies to reduce the costs from wildfires, extreme heat, and flooding. They released the first-ever report in 2021 titled "Protecting Communities, Preserving Nature, and Building Resiliency; How First-of-Its-Kind Climate Insurance Will Help Combat the Costs of Wildfires, Extreme Heat, and Floods."

Download the Recommendations

File size: PDF 9 MB (Published July 2021)

Download a 2-page Summary

File size: PDF 0.6 MB (Published July 2021)

Happy people

"Climate change is exacerbating inequities in our society. There should be no gaps between the wealthiest and the rest of us on how quickly we can bounce back from a wildfire, heat wave or flood."

– Commissioner Lara

California faces multiple growing risks, including from climate-worsened wildfires, extreme heat, and flooding. Yet insurance for each of these perils is inadequate in the state, creating growing protection gaps between insured and uninsured losses. that leave communities vulnerable and unable to build back stronger.

Californians face big risks from climate change

Three Risks Chart

To address the costs to Californians from wildfires, extreme heat, and flooding, the report recommends areas of action by the Insurance Commissioner, Governor and State Legislature.

Read Key Recommendations


Since 2015, devastating wildfires have set records for deaths and injuries, destroyed structures, number of acres burned, people evacuated, and overall costs. California's Fourth Climate Assessment projects that high severity wildfires will occur more frequently. Despite widespread insurance coverage for wildfires through standard property insurance, recent wildfires have revealed growing inequities. Many homeowners and businesses have received insufficient payouts, straining their own financial security and raising concerns about underinsurance and uninsured losses.


Key Recommendations

  • Make existing Fire Hazard Severity Maps more comprehensive, including by creating moderate, high, and very high hazard designations for the entire state, rather than only for the State Responsibility Areas
  • Develop proof of concept for a nature-based solution combined with community insurance

Extreme Heat

California has experienced record-breaking heat that disrupted the power grid in 2020 with unprecedented temperatures from the coast to the desert. Urban heat waves affect the elderly and low-income communities, increasing emergency room admissions. Yet the economic disruptions and costs caused by heatwaves, for example businesses and local governments that lose electricity as a result of grid overload, are very rarely insured.

Extreme Heat

Key Recommendations

  • Ranking and naming heat waves to better communicate the deadly risks to consumers and help communities prepare, similar to how tropical storms and hurricanes are described by "category" level
  • Develop pilot projects for extreme heat to help cities and counties better manage the costs of preparing


The intensity of heavy precipitation storms is projected to increase, putting people and properties at risk of growing damages. Yet the uptake of flood insurance has been low: Of the 1.1 million homes with a relatively high risk of flooding in 2020, less than half have flood insurance policies. Areas with more moderate flood risks have even lower flood insurance uptake rates, indicating major gaps in insurance for flood risks.

Wetlands under a cloudy sky

Key Recommendations

  • Conduct high rainfall event vulnerability analysis
  • Develop proof of concept for a wetlands nature-based solution and risk transfer