Two Senate Bills are up for voting at the Capitol; if passed, both bills could have far-reaching implications for both homeowners and insurers.
They come as California continues to slowly recover from the devastating 2017 wildfire season. The first bill, Senate Bill 894, would require insurers to renew a homeowner’s policy for at least 24 months after their home is destroyed in a wildfire. The bill, pushed by Sen. Bill Dodd, D-Napa, has a provision that would allow homeowners to add up their separate policy limits for dwellings, other structures, contents, and living expenses. The money can then be used to cover any expenses to rebuild.
Senate Bill 897, authored by Sen. Mike McGuire, D-Healdsburg, would require insurers to pay for at least 80% of the policy limit for items lost to fire, instead of everything the homeowner can itemize.
Both bills are sponsored by the California Department of Insurance, to take effect in disaster areas declared by the governor. Once passed, the bills are retroactive to July, and will apply even to claims made last year.
Some insurers have raised their concerns regarding both bills, maintaining that the legislation could make it more difficult for insurance companies to operate in California.
“At some point, people are going to look at their numbers and say, ‘if I can’t make this work, I can’t stay in this market,’” Property Casualty Insurers Association of America vice-president Armand Feliciano told The Sacramento Bee.
Feliciano added that SB 897’s mandate for 80% payment could reduce the ability of homeowners living in high-wildfire-risk areas to find affordable plans.
