Editorial: Disaster security may come at a premium

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And you think your insurance premium is big.

Imagine needing to insure 164,000 square miles of prime Golden State land from fire, earthquake and anything else Mother Nature throws its way. Suddenly that $2,000 a year for your three-bedroom bungalow in the Springs isn’t sounding so outrageous.

But that’s just what a bill co-authored by 3rd District state Sen. Bill Dodd would do – allow the State of California to purchase insurance on the open market to cover unexpected costs for disaster response.

Senate Bill 290, introduced Feb. 14 by Dodd, along with coauthors state Insurance Commissioner Ricardo Lara and state Treasurer Fiona Ma, would authorize California’s governor, insurance commissioner and treasurer to enter into an insurance policy that pays out in the event of disaster. In other words, state-wide disaster insurance.

But hold your horses, fire-wary Valley residents – if this becomes law, it isn’t a get-out-of-purchasing-insurance-free card for the rest of us. It would cover state expenses only – not private losses.

But, as state Sen. Dodd’s office stressed in a recent email to the Index-Tribune, “Individual taxpayers would benefit indirectly because it would allow the state to invest the money it saves on other programs.”

In a statement this month announcing the bill, Dodd, whose 3rd District covers Sonoma, the rising number of wildfires is putting a strain on the state’s financial resources which “threatens cuts to critical programs.” Climate change, continued Dodd, will only continue to exacerbate “devastating infernos,” and allowing the state to buy insurance would firm up budget predictability and reduce taxpayers’ exposure to increasing costs from wildfires.

And Dodd is right – the dent in the budget caused by wildfire is no chump change. According to Cal Fire, the state spent $947 million of its emergency fund for firefighting in 2017-18. That’s nearly $450 million over budget.

Since the 2017 fires, Dodd has made some headway in finding ways to mitigate damage in the inevitable event of another mass conflagration. Last year he passed a garage-door-safety bill that requires electric garage door openers to be equipped with backup batteries – he was among several North Bay residents whose garage doors failed to open amid evacuations during the 2017 wildfires.

And last week Dodd introduced legislation that would protect elderly and dependent adults by adding “abandonment” to the list of acts against them that could lead to increased penalties for caregivers. That would-be law, sadly, stems from a pair of cases involving Santa Rosa assisted-living facilities which were placed on probation by the Department of Social Services after investigations found that they abandoned residents during the North Bay wildfires.

On the other hand, Dodd’s SB 1088, which sought to require utilities to submit bi-annual fire-disaster plans to the state Public Utilities Commission, was viewed by some as flawed legislation that seemed unintentionally advantageous to utilities; it failed to gain traction and died in committee.

While both the garage-door and “abandonment” ideas are worthy, though their effects may not be far reaching. But if state disaster insurance can, at the very least, protect against the state financial losses from fire – even if it’s simply the budgetary overruns – it could mean tens of millions, if not hundreds of millions, of dollars that wouldn’t have to be siphoned from other budgetary pots – an accounting game of musical chairs that almost always finds social services still standing when the music stops.

States shopping for insurance isn’t without its precedent. Oregon is one of the few states that purchases its own disaster insurance; according to Dodd’s office, over the course of 40 years the Beaver State spent a total of $61 million on premiums and received $102 million in insurance payments. Insurance Commissioner Lara hasn’t given any estimates as to how much lawmakers would expect to pay annually for California disaster insurance, but it would be worth seeing the numbers and having the choice – which currently isn’t an option under state law.

Since 2007, California has suffered 11 of the top 20 most destructive wildfires in its history, according to Cal Fire. For anyone who doesn’t think that percentage will increase in the next 10 years, we’ve got some non-seismically retrofitted bridges we’d like to sell them.

“People who live in glass houses should take out insurance,” goes the old joke.

But the reality is that California is a glass house the size of France. The state should have the option to insure it.

Whether anyone would – and at what price – is the only question.

Email Jason at jason.walsh@sonomanews.com.

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