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Assembly & Senate Pass Significant Insurance Measures

SACRAMENTO, CA, May 31, 2018 - The California Assembly and Senate this week past significant insurance bills during floor sessions in order to meet the June 1st deadline to pass bills from their house of origin.  Insurance bills of significance included: 

AB 1875 (Wood, Dem-Santa Rosa) Online Home Insurance Finder

This bill – supported by IIABCal - requires the Department of Insurance to establish the California Home Insurance Finder on its website to help homeowners connect with an insurance agent or broker for residential property insurance. 

The bill requires the Department to survey agents, brokers, insurers, and appropriate trade associations about inclusion in the finder, and post participants’ names, addresses, phone numbers, and websites to the finder on or before July 1, 2020. 

The bill requires the Insurance Commissioner to use social media and other tools to promote the finder, to create materials in multiple languages, and to develop a pamphlet no later than July 1, 2020, that provides information on how to accurately estimate dwelling replacement costs.

AB 1956 (Limón, Dem-Santa Barbara) Fire Prevention Activities

Current law requires the director of the Department of Forestry and Fire Protection to establish a working group to identify potential incentives for landowners to implement prefire activities in state responsibility areas and urban wild-land communities and to identify all federal, state, or local programs, private programs, and any other programs requiring a cost share that involves pre-fire activities. 

This bill revises the membership to include representatives from industries with experience in fire prevention, as well as academics in the field.

SB 824 (Lara, Dem-Bell Gardens) Homeowners Insurance & Declared Disasters 

This legislation prohibits an insurer from canceling, refusing to renew, or including a surcharge or an increase in the premium of a homeowners insurance policy for one year from the date of a declaration of a state of emergency, based solely on the fact the property is in a county where a state of emergency has been declared. 

It requires an insurer that intends to reduce, within 12 months of a declared disaster, the total number of homeowners policies in the disaster area by 20% or more, to submit to the Insurance Commissioner. It also directs the Department of Insurance to conduct a data call on wildfire and fire loss experience from insurers writing homeowners insurance. It includes a provision to protect insurers from applicability when the renewal of a policy threatens the solvency of the insurer. 

SB 894 (Dodd, Dem-Fairfield) Post Natural Disaster Residential Insurance Policies 

This bill, after a total loss of a home in a declared disaster area:

(1) requires an insurer to renew a residential insurance policy for at least 2 annual renewal periods or 24 months, whichever is greater; 

(2) requires an insurer to grant an additional 12-month extension for a total of 36 months for additional living expense (ALE) if an insured acting in good faith and with reasonable due diligence encounters a delay in the reconstruction process, subject to policy limits; 

(3) allows an insured to combine payments for actual losses up to the policy limits for the primary dwelling, other structures and contents, limited to the amount necessary to rebuild or replace the home if the policy limits for the dwelling are insufficient; 

(4) specifies that the payments for losses under this provision be full replacement value without requiring the replacement of the other structures or contents; 

(5) provides that the requirements for policy renewals are retroactive for any claim filed after July 1, 2017, for policies in effect on January 1, 2019; and, (6) specifies that the sections of this bill are severable. 

Senate Floor amendments: 

(1) clarified that after a total loss of a home in a declared disaster an insured may combine payments for actual losses up to the policy limits for the primary dwelling, other structures and contents, limited to the amount necessary to rebuild or replace the home if the policy limits for the dwelling are insufficient;

(2) specified that the losses under this provision be treated as full replacement value without requiring the replacement of the other structures or contents; 

(3) deleted a requirement that additional time to collect ALE benefits applies only to policies with a dollar limit on ALE; and, 

(4) deleted retroactivity for the extension of time for ALE claims.