Legislature gets two more wildfire home insurance bills

Takeaways:

• Insurers would have to give non-renewals advance notice and opportunity to respond
• Insurers would have to cover policyholders making wildfire mitigation efforts
• Advocates against rate increases would have tougher time getting compensated

As February progresses, California legislators have introduced more bills addressing home insurance issues exposed by the January 2025 wildfires.

SB 1301, introduced February 20 by Senator Ben Allen, would amend state insurance regulation to require property insurers to give six months notice before non-renewing policies, disclose reasons for a non-renewal, give consumers time to make repairs necessary to keep their coverage and prevent insurers from non-renewing or denying coverage because of a policyholder's inquires about a claim or making a claim that is denied.

"Insurance companies have rules about what homes they cover but families losing coverage never get a chance to meet them," stated Carmen Balber, executive director of Consumer Watchdog, in a press release. "Too many Californians have lost their insurance coverage without explanation, because of bad information or simply because they filed a claim. SB 1301 gives consumers information they can act on to keep their policy, and a right to use their insurance without losing it."

SB 1076, the Insurance Coverage for Fire-Safe Homes Act, introduced February 13 by Senator Sasha Renée Pérez, would require insurers to provide homeowners insurance to homeowners who meet wildfire safety standards set by the state's insurance commissioner. These standards include home hardening and defensible space requirements. Consumer Watchdog and the Eaton Fire Survivors Network are promoting this bill.

"To help fire survivors return home, we need assurance that newly built, wildfire resilient homes will receive insurance coverage. Homeowners who meet or exceed safety standards should not be met with coverage denials," said Sen. Pérez, in a press release. "I've spoken with Eaton Fire survivors whose newly built homes will meet the highest levels of protection against wildfires but still fear they won't be able to purchase insurance. Being denied coverage after meeting safety standards sends the wrong message and is akin to being penalized for doing the right thing. SB 1076 will ensure that our communities' insurance needs are met by making coverage available to them for making existing neighborhoods safer."

Also on February 13, state insurance commissioner Ricardo Lara announced amended regulations for intervenors in insurance rate increase proceedings. Lara first proposed the changes in September, followed by a 45-day public comment period. The revised regulations were opened for a 15-day comment period ending February 28. The changes would tighten requirements for intervenor compensation. 

Consumer Watchdog frequently intervenes in rate increase cases and opposes the changes to the process. California's intervenor system compensates consumer advocates for their work in insurance regulatory proceedings.

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