Committee advances Calderon bill to create catastrophe savings accounts for homeowners

The Assembly Banking and Finance Committee voted to send Assemblymember Calderon’s AB 1726 to the Committee on Revenue and Taxation after testimony from state insurance officials and industry supporters.

Calderon said the bill would let homeowners establish state income‑free (pretax) catastrophe savings accounts similar to health savings accounts to cover qualified disaster expenses including home hardening, insurance deductibles and other recovery costs following a declared emergency. "A catastrophe savings account would empower a homeowner to prepare for these disasters by allowing them to contribute pretax dollars at their local bank or credit union," Calderon said.

Claudia Milner of the California Department of Insurance testified on behalf of Insurance Commissioner Ricardo Lara, saying the measure complements ongoing insurer mitigation programs and would make mitigation investments more accessible to homeowners. "This bill reinforces this approach by allowing catastrophe savings accounts to cover the cost of these mitigation measures," Milner said, adding the change supports wildfire risk reduction and insurability.

Industry witnesses including the California Bankers Association and California Association of Realtors offered support in committee, urging that the accounts provide a practical option for homeowners facing increasing disaster risk.

The committee recorded a motion to pass AB 1726 to the Committee on Revenue and Taxation. The author said she would accept committee amendments and thanked stakeholders for their input.

Next steps: AB 1726 moves to Revenue and Taxation, where tax and implementation details will be reviewed.