California has introduced new insurance regulations aimed at encouraging insurers to offer more policies in wildfire-prone areas.

Under these new rules, insurers will use advanced computer models, which take into account weather, geography, and other data, to set insurance rates, rather than relying solely on past losses.

The change comes in response to the impact of climate change on wildfires, which has made it difficult to find homeowners and renters insurance in some of the state’s most populous areas. 

“With our changing climate we can no longer look to the past. We are being innovative and forward-looking to protect Californians’ access to insurance,” Insurance Commissioner Ricardo Lara said in a statement.

The regulations are part of Lara’s plan to stabilize the state’s troubled home insurance market. Insurers will now be required to write policies in higher-risk areas, with a goal of covering 85% of homes in those neighborhoods. In exchange, insurers such as State Farm and Allstate have been given some regulatory concessions.

These changes aim to help homeowners who have found it difficult to get insurance in wildfire-prone areas, often turning to the state’s last-resort insurer, the FAIR Plan. However, consumer groups have raised concerns about potential rate hikes and the transparency of the computer models used by insurers.

While the regulations have support from environmental and farming groups, critics fear they could lead to higher insurance premiums without offering more policies. The new rules will take effect in January 2024 and are seen as a step toward addressing the growing insurance crisis in California.

“Consumers should expect large rate hikes but not more insurance policies sold under the new rules,” Carmen Balber, executive director of Consumer Watchdog, said in a statement.