Brought to you by:

California considers disaster levy on policies

As 44 Australian and New Zealand fire-fighters join the battle against this summer’s Californian bushfires, the state’s legislators are discussing a “homeowners insurance surcharge” to cover the costs of disaster response infrastructure.

The surcharge, originally proposed by Governor Arnold Schwarzenegger, would add 2.8% to the policies of domestic buildings in high-risk areas where floods, fires and earthquakes are most likely to happen. Homes in low-risk areas would pay 1.3%.

Legislators expect the surcharge would raise about $US280 million ($289 million) a year to prepare for and deal with natural disasters. But it won’t pay the entire disaster bill  – the cost of this year’s bushfires in California up to June 30 is already more than  $US380 million ($392 million).

Democratic Party Assemblyman John Laird, who has carried Mr Schwarzenegger’s original proposal through the budget committee stages, says the state only allocated $US69 million ($71 million) for fire-fighting, “so we’ve already overshot the budget”.