Committee Hears Bill Requiring Insurers to Disclose Wildfire Risk Scores to Consumers

The Consumer Protection and Business Committee on Feb. 24 heard testimony on Engrossed Substitute Senate Bill 5,928, a measure that would force property insurers that use wildfire risk scores to disclose those scores to policyholders when premiums rise or a policy is nonrenewed or canceled, and to file the underlying wildfire risk models confidentially with the Office of the Insurance Commissioner.

Megan Mulvihill, committee staff, summarized the bill’s two main parts: consumer-facing disclosure when policyholders are adversely affected and required insurer filings of the model, a description of its impact on rates, actuarial justification for rating factors, and how mitigation actions are considered. Mulvihill said the filings would be confidential but the insurer must post information on its website about premium discounts or incentives tied to mitigation.

“Wildfire risk score is defined in the bill…put simply, it's a numerical value derived from a model used for the purpose of predicting a property's future wildfire related loss exposure,” Mulvihill said in the staff briefing.

Senator Judy Warnek, the bill’s prime sponsor, told the committee she brought the bill after hearing constituents’ concerns at a crowded town hall about losing insurance and not knowing what to do to regain coverage. “It's becoming a statewide issue,” she said, urging transparency so homeowners understand why they may or may not get insurance.

Regulators and consumer groups pressed the case for transparency. David Fort of the OIC said the bill is “a consumer protection bill” that will help homeowners know whether mitigation investments will improve their ability to retain coverage, and that greater transparency can support market stability and equity. “Consumers deserve to know whether mitigation efforts will help them keep coverage before they invest thousands of dollars into upgrades,” Fort said.

Supporters — including AARP and local officials who lost homes to wildfire — described situations where homeowners rebuilt after fires only to be canceled or moved to more expensive policies and said knowing the drivers of a score and how to appeal or revise it is critical. Terry Cooper, mayor of Medical Lake, described a local blaze that destroyed hundreds of buildings and led to repeated insurance cancellations for rebuilt homes.

Insurer representatives urged caution about the bill’s cost and timing. Brandon Vick of the National Association of Mutual Insurance Companies said adding a large new regulatory structure could increase burdens and warned implementation might be premature. “The implementation of any large new regulatory structure simply is gonna add to the burden rather than take from it,” Vick said.

Industry groups and trade associations asked for technical fixes, narrower scope to residential property, and a delayed effective date to allow companies time to implement changes; some suggested a simple, single-page disclosure approach where consumers could request score details.

Committee members questioned how mitigation would be reflected in scores, whether disclosures would come at application time or only after an adverse action, and how the bill interacts with other programs such as the FAIR plan. OIC staff said the current draft focuses disclosure on instances when a consumer is adversely affected (nonrenewal, cancellation, or a premium increase), and that the FAIR plan is required under a separate rule to be disclosed upon nonrenewal.

The public hearing closed after a broad set of witnesses spoke both for and against the bill. No vote was taken at the hearing; sponsors and staff indicated they expect additional work and possible amendments before the committee acts.