Bill aimed at unlocking insurer discounts for home hardening gets hearing

Representative Steve Fitzpatrick introduced House Bill 136 to the Senate Business and Labor Committee as a measure ‘‘that revises laws related to insurance benefits related to risk reduction,’’ saying the change is intended to encourage insurers to offer premium adjustments for homeowners who take steps to reduce wildfire, wind and hail risk.

The bill would explicitly allow insurers to recognize a range of mitigation measures — including use of fire‑resistive or noncombustible building materials, establishing defensible space, and wind‑ and hail‑resistant measures — so carriers can document such measures in policies and avoid concerns about Montana’s rebating statute.

Frank Cote, deputy insurance commissioner for the state auditor and commissioner of securities and insurance, told the committee the bill is ‘‘a way for people to not only take some responsibility in themselves, but also get an advantage from their carrier by doing so.’’ Cote said regulators and carriers rely on actuarial studies to ensure any premium change is ‘‘actuarially relevant.’’ Bruce Spencer, testifying for Progressive Insurance Company, described the change as permitting ‘‘more accurate rating’’ rather than a simple consumer discount: ‘‘What my folks will do is they will examine fire mitigation measures, ... look at years and years of data, and they will determine what level of risk decreases ... and then they'll adjust their premium accordingly,’’ he said.

The American Wood Council and some timber‑industry witnesses supported the bill’s wildfire‑mitigation goals but urged clearer technical language. Sophie Marine, government affairs manager for the trade group, said the phrase in section 1(a)(1) about ‘‘fire resistive or non combustible building materials’’ is ambiguous and recommended aligning the statute with the state’s adopted International Wildland‑Urban Interface Code so that the statute references class‑rated roofing and ignition‑resistant exterior materials recognized in the code.

Paul McKenzie, a landowner and manager at F.H. Stultz Land and Lumber, and Shane Nellis, the council’s regional codes manager, echoed that practical standardization would reduce inconsistent insurer interpretations and give homeowners and insurers a fixed reference point for mitigation work.

Several senators pressed witnesses on how insurers would verify mitigation and apply rate changes. Insurance witnesses said carriers typically use actuaries and, when necessary, hire adjusters or inspectors on a sample basis (often at renewal) and may accept documentation such as photos and receipts. Witnesses drew a distinction between permanent mitigation (removing combustible vegetation, installing Class‑A or other tested roofing) and ad hoc emergency measures (temporarily running sprinklers), saying only the former is amenable to reliable actuarial study.

The sponsor said he could work with members on targeted amendments; the committee concluded the hearing without taking a vote.

What’s next: The bill’s sponsor indicated he would draft potential amendments requested by committee members and stakeholders. If amendments are filed, committee members asked that they be circulated so homeowners and agents can see the list of mitigations insurers might consider.