California Lawmakers Advance Trio of Consumer-Backed Property Insurance Bills

Three legislative proposals aimed at protecting California homeowners and streamlining the insurance claims process have cleared a critical hurdle in the state's appropriations committees. These bills seek to extend notice periods for policy non-renewals, increase transparency regarding valuation documents, and establish strict deadlines for claim payments. The legislative movement comes as the state faces a significant insurance availability crisis, with FAIR Plan enrollment surging 146% since 2022 due to wildfire risks.

Senate Bill 1301, authored by Senator Ben Allen, leads the legislative package by focusing on policy retention and transparency. Starting in 2028, the bill would double the advance notice insurers must provide before declining to renew a policy from 45 to 90 days, while renewals with reduced coverage would require 75 days’ notice. Furthermore, the bill prohibits non-renewals based on certain claims or the age of a home’s roof and mandates a 120-day notice if a homeowner can remedy a specific condition to retain their coverage. The Department of Insurance estimates that implementing these changes could increase annual staffing costs by $465,000 to $802,000 in the near term.

Two additional bills by Senator Sasha Renée Pérez, SB 877 and SB 878, address the claims and valuation process. SB 877 expands the documents policyholders can request from insurers to include preliminary and final calculations of property valuations, measurements, and repair costs. SB 878 establishes firm deadlines for insurers to respond to residential property claims and mandates that insurers pay the actual cash value of a home determined to be a total loss within 30 days. The bill also requires insurers to pay interest on certain late payments, a move intended to expedite financial recovery for policyholders after a loss.

The legislation is heavily supported by consumer advocates, including Every Fire Survivor’s Network and Consumer Watchdog, who argue these protections are necessary as wildfire losses drive insurers away from high-risk communities. However, the American Property Casualty Insurance Association has voiced strong opposition, stating that the measures would impose unnecessary operational burdens and limit the ability of companies to effectively underwrite risk. The industry group warns that these restrictions could ultimately undermine efforts to improve insurance availability in California at a time when the state-mandated FAIR Plan is already seeing record growth.