New law requires annual review of distressed insurance areas and strengthens transparency for wildfire-prone communities
ORINDA, CA — Yesterday, Governor Gavin Newsom signed Assembly Bill 2724, authored by Assemblymember Rebecca Bauer-Kahan (D-Orinda), a law that makes sure the communities hit hardest by wildfire risk are properly recognized as "distressed areas” so insurance companies expand coverage where it’s needed most.
AB 2724 requires the California Department of Insurance (CDI) to review and update their identified “distressed areas” annually based on changes to designated wildland-urban interface (WUI) areas, starting January 1, 2027. This ensures insurance companies are incentivized to cover WUI areas despite their high fire risk. The law also requires CDI to consult with CAL FIRE, provide opportunities for public input, and publish an annual list of ZIP Codes in distressed areas, starting January 1, 2028.
For communities where homes meet open space and wildfire-prone land, access to affordable homeowners insurance has become increasingly difficult. Orinda has experienced significant insurance disruption, where more than a third of home insurance policies have been dropped in the past five years. Last year, well over half of State Farm policyholders received nonrenewal notices.
"For too many families in our district, the FAIR Plan has become the only option, not the last resort it was meant to be," said Assemblymember Bauer-Kahan. "AB 2724 makes sure that the Wildland Urban Interface in our communities is not left behind as we rebuild a healthy insurance market."
Read the full bill provisions here:
A Year of Results for Wildfire-Prone Communities
AB 2724 builds on Assemblymember Bauer-Kahan’s continued success securing state funding for wildfire preparedness, including millions of dollars for fire equipment upgrades, debris removal, new firefighting technologies, and other critical investments that keep East Bay communities safer.
AB 290 — FAIR Plan Modernization
Last year, Governor Newsom signed Assembly Bill 290, authored by Assemblymember Bauer-Kahan, requiring the California FAIR Plan to establish an automatic payment system for policyholders. The law also protects policyholders from cancellation or nonrenewal solely because they are not enrolled in automatic payments and provides a payment period for overdue installment premiums. AB 290 took effect January 1, 2026.
$5 Million for Wildfire Prevention and Evacuation Preparedness
Earlier this month, Assemblymember Bauer-Kahan announced $5 million in state General Fund funding for wildfire prevention and evacuation preparedness projects across Assembly District 16. The funding includes:
- $2 million for the San Ramon Valley Fire Protection District to clear built-up dry grass and brush in and around Mount Diablo State Park.
- $2 million for the City of Orinda for regional Community Risk Reduction and WUI mitigation, including maintenance of fuel breaks developed in partnership with CAL FIRE, the Moraga-Orinda Fire District, EBMUD, the East Bay Regional Park District, and private landowners.
- $1 million for Contra Costa County for wildfire and evacuation modeling tools, including testing of contraflow operations, Red Flag Day parking restrictions, and evacuation strategies.
"Wildfire preparedness and insurance security go hand in hand,” said Assemblymember Bauer-Kahan. “We need to reduce wildfire risk on the ground, while making sure homeowners can obtain insurance. AB 2724 is another step toward doing both.”
AB 2724 is part of a broader effort to strengthen wildfire resilience, improve insurance availability, and ensure that state policy reflects the conditions facing California’s most vulnerable communities.
