What is Senate Bill 982: The Affordable Insurance and Recovery (AIR) Act?

This past February, California State Senator Scott Wiener proposed Senate Bill 982, or the Affordable Insurance and Recovery (AIR) Act. The bill requires fossil fuel companies to cover the costs of damages caused by climate-driven disasters, such as wildfires. Since the 1980s, fossil fuel companies have known about the link between the burning of fossil fuels and the rise in global temperatures, and have spread disinformation that denies this link to support their financial and political gains. Due to this, the bill argues that major fossil fuel companies should be held responsible for these climate disasters.

S.B. 982 cites existing laws that ensure the “right of protection from bodily harm,” “the right to possess and use property,” and the right to compensation in the case of an “unlawful act or omission of another” that results in damages to property or bodily harm. The bill seeks to apply those legal rights to recover the finances of the California FAIR Plan Association, the California Infrastructure and Economic Development Bank, and insurance policyholders in the case of damages resulting from climate disasters. In the bill, a climate disaster is defined as a weather event in “which climate change was a substantial factor,” which can include “a wildfire, heat wave, drought, windstorm, hurricane, flood, tornado, or other storm.” 

The bill would permit the Attorney General to execute civil action on behalf of the people of California to recover losses suffered by insurance policyholders from climate disasters. Recovery of losses suffered includes: “climate-attributable damage,” “court costs, litigation expenses,” “attorney’s fees,” and any “other relief that the court or jury deems proper.” 

California’s Insurance Landscape

In recent years, insurance companies have been canceling policies, refusing renewals, and leaving California altogether, due to the rising risk of wildfires. Insurance premiums — the amount of money an individual or business pays regularly to an insurance company for financial protection — have spiked, and will continue to rise this year as much as 30%. Tens of thousands of Californians have been forced to turn to the Fair Access to Insurance Requirements plans (FAIR Plans) for coverage. FAIR plans are state-mandated and privately funded insurance plans that cover policyholders for fire damage. They were initially designed in 1968 both to help people find coverage for high-risk properties and to reduce unfair or discriminatory insurance coverage practices. They are now considered a last resort for insurance coverage, as premiums run higher and coverage is often less comprehensive.

Insurance Commissioner Ricardo Lara implemented an insurance strategy that encouraged insurers to write policies for high-risk areas and incentivized their return to the state in an effort to stabilize the insurance market. However, critics and advocacy groups argued that the plan actually incentivized insurers to dump policyholders “to get rate hikes” and “allowed companies to avoid insuring people in high-risk wildfire areas.” Critics claim the plan allowed higher premiums for all Californians, and that certain loopholes in the plan allowed insurers to drop high-risk policy holders. Reporter Levi Sumagaysay summarizes the insurance strategy put forth by Commission Lara: “Insurance customers are facing possibly drastically higher premiums in the short run, with the hopes that it will all lead to stabilization of the market in the long run.”

Proposed S.B. 982 states that the rising affordability concerns from increased climate disasters is a direct result of the deceptive conduct of fossil fuel companies. The bill outlines that the rise in insurance premiums “have contributed to increased housing costs,” and “landlords pass these costs on directly to tenants in the form of higher rents, which can contribute to housing instability, displacement, and eviction, disproportionately burdening renters and low-income households.” 

The bill also claims a link between the unaffordability of insurance to inaccessible mortgage financing, which leads to lower property values, increases the risk of defaults and foreclosures, and slows the rate of new housing development. It cites that “wildfire risk was responsible for more than 50 percent of the requested rate increase.” Ultimately, S.B. 982 hopes to stabilize the insurance market by shifting the costs of climate-driven disasters from consumers to large oil and gas companies, with the goals of lower insurance premiums, decreased reliance on the FAIR Plan, and preventing insurers from leaving the state. 

Wildfires, Climate Change, and Responsible Parties

Since 2018, California has experienced the largest wildfires in state history. The Los Angeles Fires of 2025 totalled $28 billion in losses with over 16,000 structures burned. Wildfires are a natural part of the ecosystem in Southern California, with some species even depending on it. However, scientists have found that coastal Southern California is prone to catastrophic wildfires; the hot, dry, and windy weather conditions in the region increase the risk of fires starting and the speed at which they spread. Scientists also found that the burning of fossil fuels directly contributed to “40 percent of the area burned by wildfires.” A 2021 study supported by the National Oceanic and Atmospheric Administration concluded that climate change has driven the increase in fire weather in the western United States. Increased temperatures and dry atmosphere, which fuel fire weather, are caused by human activity, namely the burning of fossil fuels. 

The Union of Concerned Scientists, a national nonprofit made up scientists, analysts, and policy experts, published a report in July 2015 entitled “The Climate Deception Dossiers: Internal Fossil Fuel Industry Memos Reveal Decades of Corporate Disinformation.” In their report, they demonstrate that fossil fuel companies recognized the consequences of climate change as early as 1988. By 1998, strategic plans and campaigns had been implemented to cast doubt on the burning fossil fuel’s impact on climate change, undermining scientists, communities, and activists. The report includes 85 internal memos and documents that provided evidence of the intentional disinformation and deception to “support its political aims and maintain its lucrative profits.” Fossil fuel companies listed in the report include BP, Chevron, ConocoPhillips, ExxonMobil, Peabody Energy, and Shell. 

In 2023, California Attorney General Rob Bonta filed suit against ExxonMobil, Shell, Chevron, ConocoPhillips, and BP. In 2025, California lawmakers considered a package of bills known as the Polluters Pay Climate Superfund Act, which would have required large oil and gas companies to contribute to a state fund supporting climate adaptation efforts. However, due to industry opposition, the bill stalled. 

Support for S.B. 982

There are several organizations and advocates who strongly support S.B. 982. Among them include Extreme Weather Survivors, California Environmental Voters, Center for Climate Integrity, and many Black Homeowners. These supporters cited the insurance affordability crisis fueled by climate disasters and the need to hold polluters accountable. The Black Homeowners group argues that the LA Fires disproportionately affected Black households, “with nearly 60% of Black-owned homes in the area sustaining severe damage.” According to a report by the Greenlining Institute, “communities of color are significantly more likely to be uninsured or underinsured.” Mary Creasman, the CEO of California Environment Voters, argues that “everyone except oil companies carries the burden right now.” Policy Advocacy Director Melissa Romero of Environmental Voters of California argues that the “savings in the insurance market would offset any increased energy costs.”

Criticisms of S.B. 982 

The clearest opponents to California S.B. 982 are oil and gas industry groups. Jim Stanley, a spokesperson for the Western States Petroleum Association (WSPA), said “the bill would raise gasoline prices and harm employment.” He also described the proposal “as a political measure that would expose oil and gas companies to liability for natural disasters across the state, which he said would lead to extensive litigation.” Opponents, which include the WSPA and the State Building and Construction Trades Council of California, argue that S.B. 982 would increase the cost of utilities and gas, as well as disrupt supply chains by increasing the cost of transportation.

What Happens Next? 

In April 2026, S.B. 982 failed to pass through California’s Senate Insurance Committee after a 3-2 vote. However, the committee granted reconsideration, meaning that lawmakers could attempt to bring it back for another vote before the end of California’s 2025-2026 legislative cycle. If the bill does not advance during that period, a lawmaker will have to introduce a new version of the bill during California’s 2027-2028 legislative session, when lawmakers begin introducing and considering new bills.

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