Victims would be able to sue oil and gas companies for compensation, if it becomes law.
Under
Senate Bill 222, victims of certain disasters—including wildfires—in California would be able to sue oil and gas companies for compensation.
Authors of the new bill, sponsored by the Center for Climate Integrity and California Environmental Voters, said the bill seeks to target those “responsible for a climate disaster or extreme weather or other events attributable to climate change due to the responsible party’s misleading and deceptive practices or the provision of misinformation or disinformation about the connection between its fossil fuel products and climate change.”
Also known as the “Affordable Insurance and Climate Recovery Act,” the bill was introduced on Jan. 27 by Democratic state Sen. Scott Wiener and would allow insurers to file civil lawsuits against oil and gas companies seeking damages, if specified criteria are met, including damages of $10,000 or more.
The cost of the
damage caused by the Los Angeles fires this month is estimated to be more than $250 billion and up to $275 billion, according to a Jan. 13 report from AccuWeather.
The deadly wildfires are also expected to aggravate California’s existing insurance
crisis. Insurance costs could reach $20 billion or higher, according to estimates by Wells Fargo analysts.
The legislation would improve insurance affordability in California by “shifting the burden of increased insurance costs away from California ratepayers to the fossil fuel companies driving the climate crisis,” a Jan. 27
statement from Wiener’s office says.
“Major fossil fuel companies intentionally misled the public for decades about the impacts of their products, and now Californians are paying the price with devastating wildfires, mud slides, sea level rise, and skyrocketing insurance costs,” his office said.
The bill met resistance from Wiener’s Republican colleagues and the oil and gas industry.
“
Instead of owning up to their government mismanagement and failures, they’re pointing fingers at climate change,” Republican state Sen. Brian Jones
said in a Jan. 27 post to social media platform X after the bill was introduced. “
Maybe next, they’ll blame the gas pump for homeless encampments lining our streets!“
Catherine Reheis-Boyd, chief executive of the Western States Petroleum Association, said in a
statement, “We need real solutions to help victims in the wake of this tragedy, not theatrics,” claiming that the lawmakers “see the Los Angeles fires as nothing more than a political opportunity.”
She said consumers and California’s economy rely on oil and gas from fossil fuels, while the state is attempting to reduce this reliance.
“The vulnerabilities in the existing oil and gas infrastructure must be addressed,” she said.
Other Wildfire Costs
A Jan. 7
report by California’s Legislative Analyst’s Office (LAO) said that wildfire-related costs and the state’s climate policies have driven up the state’s
electricity rates because the costs were passed on to ratepayers.
State law allows California’s state-pooled insurance program, the FAIR plan, to pass extra insurance coverage costs to non-FAIR plan policyholders.
The FAIR plan is the last resort for those with high risk who cannot obtain insurance from individual insurance companies. The state requires all licensed insurers to pool together to provide coverage for the FAIR plan.
There are about 2,500 policyholders of the FAIR plan in the
two fire zones of the Los Angeles wildfires, including 1,467 policies in the Pacific Palisades, where the fire has destroyed or damaged an estimated 8,000 structures, and just under 1,000 policies in Altadena, the area impacted by the Eaton fire, which has destroyed or damaged more than 10,000 structures.
