Insurers push back as energy companies stand to gain protection under new bill: 'Legal protections that are not available to almost any other business entity'

When extreme weather hits, someone has to pay for the damages. But insurance companies and utility providers can't seem to agree on who should foot the bill. 

What's happening?

A new law is being considered in North Dakota that would protect power companies from lawsuits when their electric lines inadvertently cause wildfires. Utility providers and the state fire marshal backed the bill, which passed through the state Senate nearly unanimously, according to The Bismarck Tribune.

As it stands, the bill would allow a power company to duck responsibility for disasters — even if its power lines ignited a blaze — as long as it had submitted a plan showing that it was trying to prevent such fires, the outlet explained.

The insurance industry pushed back, claiming that the language of the bill gives too much power to utility providers to avoid paying the costs after fires.

"The utilities are getting legal protections that are not available to almost any other business entity in the state," said Phillip Arnzen, the Midwest vice president for the National Association of Mutual Insurance Companies, per the Tribune.

Why does this kind of legislation matter?

The North Dakota bill is not the first of its kind. Wildfires and other extreme weather events are becoming more intense and more frequent because the fuel these utility companies often burn is heating up and destabilizing the planet.

As a result, utilities and insurers are finding themselves similarly at odds across the western United States. A California power company even declared bankruptcy in 2019, the Tribune reported.

As for North Dakota, the state faced deadly fires spread by drought conditions and high wind gusts in October. Two people died, and the damage is in the millions of dollars. Authorities are investigating the potential role of a downed power line, while two other fires in the state were linked to unsafe industry practices at oil wells, according to the Tribune report.

What's being done to manage fire liability?

The insurance industry proposed a few changes to compromise on the bill. The amendments would require utilities to renew fire mitigation plans every year instead of every three years. They would also require utilities to follow specific industry standards to qualify for liability limits, the Tribune explained.

For what it's worth, the lawmakers behind the bill claim that it will spur better fire management from power companies and that a provider will still be held liable if it does not follow the rules.

Do you think America is in a housing crisis? Definitely 🙁 Not sure 🤷 No way 🏘️ Only in some cities 🏙️ Click your choice to see results and speak your mind.

Yet ratepayers are impacted either way, caught in the lurch between insurers and utilities. You can shield yourself from some of the crossfire by taking your home's energy supply off the fuel-burning grid and exploring cleaner, cheaper options.

Join our free newsletter for good news and useful tips, and don't miss this cool list of easy ways to help yourself while helping the planet.