Reps. Thompson, LaMalfa Introduce Disaster Resiliency Legislation to Mitigate California Insurance Crisis

Washington – Today, Representatives Mike Thompson (D-CA) and Doug LaMalfa (R-CA) introduced the Disaster Resiliency and Coverage Act of 2024 (H.R. 7849), legislation providing homeowners in disaster-prone regions with broad incentives to harden their properties against wildfires and other risks. The legislation is intended to help address the ongoing insurance crisis in California and other states, as the rising frequency and intensity of natural disasters has led insurers to raise rates and, in several cases, exit certain markets entirely.

“Property insurance has quickly become one of the single biggest issues I hear about in my district. People can’t get covered: either the available options are completely unaffordable, or there are no options available at all. It’s an untenable situation – which is why this legislation is necessary,” said Thompson. “By incentivizing homeowners to mitigate disaster risks on their property, we aim to bring insurers back into the market and bring rates back into more affordable territory.”

“Homeowners must be able to harden their property as they see fit, especially as the risk of wildfires due to poor forest management escalates,” said LaMalfa. “With this bill, we’re bolstering resilience, but this will also hopefully reduce overall insurance rates and bring back suppliers that have left California entirely because of the risks.”

The legislation includes four main provisions. The first creates a grant program, administered through State governments, through which individual households in designated disaster-prone regions (with certain limitations) are eligible for up to $10,000 for specified disaster resiliency work on their homes. The second and third provisions (Sections 3 and 4 of the legislation) mirror existing legislation (H.R. 4070) stipulating that payments from State-run disaster resiliency programs and payments from various federal emergency agricultural programs are not considered income for federal tax purposes. The final section, which also mirrors legislation previously introduced by Rep. Thompson, provides a 30 percent tax credit for qualified disaster risk mitigation activities conducted by individuals or businesses. The credit is meant to complement the grant program by providing meaningful assistance to larger property owners for whom mitigation activity costs would far exceed $10,000.

The text of the legislation can be found here.