Committee recommends do-pass on bill covering fire-related mudslide damage; members raise cost concerns, 7-0

Senate Bill 215, sponsored by Senator Jaramillo, would require property insurers to cover loss from mudslides or debris flow when the proximate cause is a prior wildfire that altered terrain or created unstable conditions.

The sponsor said the bill closes a coverage gap that left many homeowners in fire-affected areas without insurance coverage after post-fire mudslides. Witnesses and committee staff described cases where homes below burn scars were inundated with mud and debris and did not receive coverage under standard flood or wildfire policies.

Officials from insurance oversight and consumer-protection offices told the committee that if the proximate cause of the loss is the post-fire terrain change, the claim should be covered by property insurance rather than solely by federal flood programs. Committee members sought clarification about how adjusters would determine proximate cause and pressed witnesses on whether adding this proximate-cause coverage would raise premiums or reduce market availability of private insurance in fire-prone regions.

An insurance bureau chief and an agent in the room said the change could increase claims and therefore premiums in some areas; the committee exchange noted that other states use proximate-cause approaches and that the bill is intended to address unusually severe post-fire debris events.

After extended questioning and discussion of actuarial implications, the committee voted 7-0 to recommend the bill pass. Members said follow-up work will be required to examine premium impacts, interactions with FEMA and existing flood insurance programs and whether any consumer protections or targeted funding are necessary to preserve market capacity for high-risk areas.

Committee action: Motion to do pass recorded 7 yes, 0 no.