Mary Creasman was focused on insurance issues as she headed to the California Capitol on Earth Day. Creasman, representing the nonprofit California Environmental Voters, was in Sacramento to back California Senate Bill 982 after its advancement by the Senate Judiciary Committee.
The bill, known as the Affordable Insurance and Recovery Act, aims to empower California’s attorney general to sue fossil fuel companies for climate damages to stabilize insurance. Due to destructive wildfires, insurance companies have increasingly exited California and raised policy costs significantly, experts say.
Democratic state Sen. Scott Wiener introduced the bill to hold Big Oil accountable for contributing to global warming, which exacerbates wildfires and extreme weather. “That money would support the FAIR Plan after a disaster,” Creasman said, referring to the state program serving as an “insurer of last resort.” This initiative aims to keep rates affordable post-disaster and fund grants to reinforce homes against extreme weather.
Surveys indicate that 66% of voters demand accountability from corporations for their role in the climate crisis. However, industry groups argue the bill’s broad scope could spike costs for Californians and face legal challenges.
SB 982 targets companies with a market cap or worldwide revenue of $500 million involved in fossil fuels. The State Building and Construction Trades Council of California, representing over 450,000 workers, opposes the measure, citing multiple causes of climate change and the burden of assigning liability solely to fossil fuel companies.
The Western States Petroleum Association also opposes the bill. Fossil fuels significantly contribute to global warming, with Democratic states increasingly pushing the industry to compensate for damages, while Republican lawmakers seek to shield companies from liability.
The insurance sector is the latest battleground in this effort. No state has made fossil fuel companies accountable for climate-driven insurance issues, although similar measures are under consideration in Hawaii and New York.
Climate-related disasters, such as wildfires and floods, are inflating insurance costs, Sen. Wiener said. “Insurance premiums have skyrocketed, making it unaffordable for people to insure their homes.” The FAIR Plan has become unstable, and taxpayers bear the cost of climate disasters, while corporations evade responsibility.
As of last September, the FAIR Plan insured nearly $700 billion in property, a significant increase from previous years. In February 2025, a $1 billion FAIR Plan assessment was approved to address recent claims from wildfires.
A January poll found over 20% of California homeowners are uninsured due to canceled policies and high premiums, Creasman noted. “Our insurance market is in crisis. The core question is who will pay for these costly climate disasters?”
The FAIR Plan has not taken a position on the bill, and State Farm, the largest private home insurance provider in the state, did not comment. Ben Collier, an associate professor at the University of Wisconsin-Madison, stated that insurance challenges linked to climate disasters are reaching a boiling point, with premiums up 28% nationally since 2017. Insurers have become reluctant to cover policyholders in high-risk areas, especially in California, where stricter regulations have reduced competition and supply.
In March, experts proposed creating a federal reinsurance entity to mitigate the effects of extreme weather events.
Original Story at insideclimatenews.org