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California lawmakers block Newsom's push to limit wildfire liability

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Ashley Zavala
California lawmakers block Newsom's push to limit wildfire liability
AI Summary

California lawmakers have rejected Governor Gavin Newsom's proposal to limit the ability of insurance companies to recoup wildfire losses from investor-owned utilities. The governor argued the change was necessary to protect the state's wildfire liability fund, but legislators and insurers feared it would destabilize the insurance market and increase premiums.

Why it matters

The decision maintains the current financial risk structure for utilities and insurers in a state highly vulnerable to climate-driven wildfires, impacting both consumer insurance rates and utility company stability.

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California lawmakers have blocked Gov. Gavin Newsom from pursuing his plan to prevent insurance companies in California from recouping their losses from investor-owned utilities that cause a catastrophic wildfire. Four sources who spoke on the condition they remain anonymous, said the negotiations broke down late Thursday night during a closed-door meeting between the governor's staff and Democratic state lawmakers who are part of a working group on wildfire liability. Even though talks continued late Friday night, lawmakers would not budge on the issue. The push to shift some of those wildfire liability costs onto insurers was part of a broader plan the governor has been pushing to limit who and how much the state's three investor-owned utilities pay when they cause a catastrophic wildfire.

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