Home Hardening Investments Yield Negligible Insurance Discounts

California mandated in 2022 that insurers provide premium discounts for wildfire mitigation measures such as fire-resistant roofing, ember-resistant vents, and defensible space. The Department of Insurance created a list of twelve qualifying measures. Yet the actual discounts offered by insurers vary wildly, from a fraction of a percent to over 40%, with most falling at the low end. AAA offers up to 12.5% for its newer policies, but many carriers offer single-digit discounts that do not come close to offsetting the cost of the hardening work itself. This matters because home hardening is one of the only things an individual homeowner can actually do to reduce their wildfire risk, and the economics are completely broken. A Class A roof replacement costs $15,000-$40,000, ember-resistant vents run $2,000-$5,000, and a full defensible space program costs thousands annually to maintain. If the insurance discount is 3-5% on a $3,000 premium, the homeowner saves $90-$150 per year, meaning the payback period for a roof alone exceeds 100 years. Homeowners who invest in hardening are not meaningfully rewarded, which suppresses adoption of the very measures that could reduce wildfire losses system-wide. The structural reason is that insurers set discounts based on their own proprietary risk models, and there is no regulatory standard requiring discounts to be proportional to the actual risk reduction achieved by each measure. Insurers also face a free-rider problem: if one carrier offers generous mitigation discounts, it attracts higher-risk customers who have hardened their homes but still live in fire zones, while competitors avoid those ZIP codes entirely. Without a shared, standardized framework linking specific hardening actions to specific premium reductions, the mandate produces inconsistent and inadequate incentives.