Mary Creasman had insurance on her mind as she made her way to the California Capitol on Earth Day. 

Creasman, of the nonprofit California Environmental Voters, was in Sacramento Wednesday to support California Senate Bill 982 after it was advanced by the Senate Judiciary Committee on Tuesday. 

The bill, also called the Affordable Insurance and Recovery Act, would empower California’s attorney general to sue fossil fuel companies over climate damages in an effort to shore up insurance.

Amid destructive wildfires, insurance companies have retreated from California in large numbers and increased policy costs significantly, according to advocates and experts.

The new bill, introduced by Democratic state Sen. Scott Wiener of San Francisco, would have Big Oil companies pay up for the ways fossil fuels have historically contributed to the global warming that is driving conditions for deadly wildfires, more powerful storms and other weather extremes.

“That money would go into bailing out the FAIR Plan after a disaster,” Creasman said, referring to the California program that acts as an “insurer of last resort.” 

That would “keep rates lower for folks recovering after a disaster,” she said.

The bill would create a fund for any money fossil fuel companies pay as a result of lawsuits from the attorney general. In addition to shoring up the FAIR Plan, those funds would also go toward a grant program to help communities reinforce their homes to better withstand extreme weather and climate disasters. Traditional insurers will also have reason to stay or return to the state if the fund helps residents with “home hardening,” Creasman said.

She pointed to surveys that showed 66 percent of voters across party lines demanded billion-dollar corporations be held responsible for the climate crisis and should provide money toward home insurance costs.

Industry groups countered Wednesday that the bill is too broad and would negatively impact the companies that provide fuel for the state—by extension spiking costs for Californians. The companies also claim the bill is unconstitutional and say it will draw legal challenges.

SB 982, which was referred to the Senate’s Insurance Committee, does not name any specific  company. A draft of the bill says it would focus on companies with a market cap or worldwide annual revenue of $500 million that have been or are “engaged in the extraction, production, manufacture, or sale at wholesale of covered fossil fuel products.”

The State Building and Construction Trades Council of California, on behalf of more than 450,000 construction workers, urged state Senate leaders to “strongly oppose” the bill. 

“There’s a multitude of causes of climate change. I think everybody agrees on that and flip-flopping jurisprudence to say that a legal product is strictly liable for the entirety of climate change is just not responsible policy,” said Erin Lehane, a spokeswoman for the labor union. 

“We believe it’s exploiting a true crisis in California, the insurance crisis as well as the wildfires. The horrible personal tragedies that have come from these disasters,” Lehane added. “But this is not the answer.”

The Western States Petroleum Association, an industry trade group, also opposes the bill.

Fossil fuels are a major contributor to global warming. Democratic states are increasingly trying to make the industry pay for some of the damage—even as Republican lawmakers seek to immunize companies from climate liability. 

Insurance is the latest front in the battle. The author of the California bill said no other state has yet made fossil fuel companies pay for climate-driven insurance problems, but both Hawaii and New York are considering similar measures.  

Climate disasters fueled by climate change, including larger and more destructive wildfires, floods and other extreme weather events, are “exploding” insurance costs, Wiener said in an interview Wednesday afternoon. 

“Insurance premiums have gone through the roof,” Wiener said. “To the point where people cannot afford to insure their homes.” 

The state’s FAIR Plan, which acts as a public safety net insurance program for people who can’t get private insurance, has become unstable as a result, he said.

“When we look at who pays the cost of climate-fueled disasters, it is the individuals who are harmed. It’s taxpayers, and it’s people having to pay higher insurance costs,” Wiener said. “And who’s not paying? It’s the corporations whose products cause climate change.” 

As of last September, California’s FAIR plan was insuring almost $700 billion in property across the state—a 52 percent increase from the year before and a 317 percent increase from 2021, California lawmakers reported in the new bill. 

In February 2025, the state’s insurance commissioner approved a $1 billion FAIR Plan assessment on member insurers, the first such assessment in over 30 years. The FAIR Plan had just received nearly 3,700 claims for damages caused by the Palisades Fire and about 1,325 claims caused by the Eaton Fire.

Creasman, of California Environmental Voters, highlighted the findings of a January poll that more than 1 in 5 California homeowners are uninsured because of canceled policies and unaffordable premiums.

“We are on the front lines of what the world will be experiencing,” said Creasman. “Our insurance market is in crisis. The big core question at the center of this insurance crisis is who is going to pay for these climate disasters that are hugely expensive to recover from.” 

A spokesperson for the FAIR plan said it has not taken a position on the bill. The state’s largest private home insurance provider, State Farm, did not immediately respond to a request for comment.

Ben Collier, an associate professor of risk and insurance at the University of Wisconsin-Madison, said broader insurance problems linked to climate disasters and their aftermath have been well-documented and are heading to a boiling point.

“Insurance affordability and availability has become a very big challenge in the last seven or eight years,” Collier said Wednesday.

Insurance premiums have increased 28 percent on average nationwide since 2017, after adjusting for inflation, he said. It’s even worse in higher-risk areas. 

“And access to insurance has declined,” he said. “Some insurers have decided that they aren’t willing to cover policy holders, especially in disaster-prone areas.”

The problem became particularly acute in California following 2017 and 2018 wildfires, including the deadly Camp Fire. There’s been substantial development in areas most prone to growing climate and wildfire risks in the state, Collier noted.

“The stricter rules around how much insurers [charge] and what they can use to price risk in the state has reduced competition there, reduced supply of insurance,” Collier added.

In March, he and two other experts proposed that the United States create a “federal reinsurance entity”—reinsurance is insurance for insurers—to address the fallout from extreme weather events.