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California Senate reviews bill SB 222 allowing insurers to sue fossil fuel firms

California Senate reviews bill allowing insurers to sue fossil fuel firms

Senators Scott Wiener (D-San Francisco) introduced SB 222, the Affordable Insurance and Climate Recovery Act. SB 222 improves 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, and makes victims of major climate disasters whole by allowing them to seek damages from fossil fuel companies in court.

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.

When climate disasters strike, SB 222 allows homeowners and businesses to recover damages from the fossil fuel companies responsible for the disasters.

In addition to Senator Wiener, SB 222 is primary co-authored by Assemblymember Al Muratsuchi (D-Torrance), and co-authored by Senators Sasha Renée Pérez (D-Pasadena), Lena Gonzalez (D-Long Beach), Caroline Menjivar (D-San Fernando Valley), Henry Stern (D-Los Angeles), Jerry McNerney (D-Stockton) and Assemblymember Dawn Addis (D-Morro Bay). SB 222 is sponsored by the Center for Climate Integrity, California Environmental Voters, and Extreme Weather Survivors.

The California Senate is reviewing a bill that would let insurance companies and policyholders file civil lawsuits against fossil fuel firms for their role in climate-driven weather disasters.

Californians are paying a devastating price for the climate crisis, as escalating disasters destroy entire communities and drive insurance costs through the roof

Senators Scott Wiener

“Containing these costs is critical to our recovery and to the future of our state. By forcing the fossil fuel companies driving the climate crisis to pay their fair share, we can help stabilize our insurance market and make the victims of climate disasters whole,” said Senator Wiener.

“The Eaton Fire destroyed over 9,000 structures in my District, wiping out almost the entire town of Altadena, leaving thousands of my residents calling for justice and accountability,” said Sen. Sasha Renée Pérez (D-Pasadena). “Our communities have never seen anything like this in urban Los Angeles. The reality is that climate change is here and will continue impacting communities everywhere. What makes this worse is decades ago, Big Oil knew this would be our future, but prioritized lining their own pockets at the expense of our environment and the health of our communities. The Affordable Insurance and Climate Recovery Act will hold the oil industry responsible for the damage it has inflicted, and provide relief for future communities impacted by climate disasters.”

The backstop for wildfire insurance funds shouldn’t just be other California policyholders. Those who caused these fires to become more dangerous with their pollution should finally pay their fair share.

Senator Stern

“California’s taxpayers and property owners are shouldering the sole financial burden of damages caused by accelerated climate change. From the billions of dollars we must now budget at the federal, state, and local levels to our insurance premiums,” said Senator Menjivar. “This year my fellow legislators and I are developing a cohesive bill package, which includes SB 222, to finally hold polluters responsible for their share of the costs.”

Wiener stated that fossil fuel companies have misled the public for decades about the harm caused by their products. The bill would allow insurance carriers, including the California FAIR Plan, to recover disaster-related losses directly from these companies instead of increasing premiums. He argued that this would bring significant capital into the market, stabilizing insurance costs.

The bill permits legal action against those responsible for extreme weather events linked to climate change. It targets misleading or false statements about the connection between fossil fuel products, climate change, and disasters.

The bill defines a climate disaster based on two conditions. First, the event must meet at least one of the following: qualify for federal aid, impact infrastructure or the economy, appear on the National Centers for Environmental Information’s billion-dollar disaster list for December 2024, trigger a state of emergency under California law, or cause insured losses exceeding $100 mn in the state.

Second, the event must have been significantly worsened or caused by fossil fuel-related climate change. Scientific evidence would need to confirm that climate change from these products substantially contributed to the disaster.

Members of the California Assembly said this bill is part of a broader effort to hold those who profited from the crisis accountable. Assemblymember Dawn Addis supported the measure, and Sen.

Henry Stern of Los Angeles argued that wildfire insurance costs should not fall entirely on California policyholders. He stated that those whose pollution made fires more dangerous should cover part of the costs.