California moves to insure urban forests amid mounting insurance crisis

California’s insurance regulator is testing a scheme to sell parametric policies that would compensate owners of urban forests for climate-induced damage such as extreme heat, drought, storms and pest infestations. Working with the UC Santa Cruz Center for Coastal Climate Resilience, the pilot seeks to create a new market for “green infrastructure” coverage, echoing a United Nations Environment Programme effort called Total Balance Sheet Transition.

The state’s major insurers have already reduced or stopped offering property policies, leaving many residents dependent on the under-funded FAIR Plan. As the issue gains political traction, Democratic contenders Jane Kim and Ben Allen are campaigning for the insurance commissioner role, promising to address whether such UN-backed concepts will be pursued. The controversy highlights broader tensions over climate policy, housing costs and the role of government in shaping insurance markets.