California lawmakers have introduced new legislation aimed at stabilizing the state’s property insurance market.
These bills propose expanding FAIR Plan coverage to manufactured homes, extending nonrenewal and cancellation moratoriums, and establishing a commission to study community hardening programs, according to a report from AM Best.
Senate Bill 547 would extend the state’s one-year nonrenewal and cancellation moratoriums to commercial properties in ZIP codes within or adjacent to fire perimeters after a state of emergency is declared. The extension would apply to homeowners associations, condominiums, affordable housing units, and nonprofits, according to the California Department of Insurance (CDI).
Senate Bill 525 would allow the California FAIR Plan to cover manufactured homes by modifying the definition of “basic property insurance.”
Another proposal would create the Community Hardening Commission as an independent CDI unit. The commission would meet at least quarterly to develop wildfire community hardening standards and provide recommendations. It would be required to consult with specified stakeholders, including the insurance industry and public safety districts.
By July 1, 2027, the commission would need to submit the new standards along with a report to the legislature outlining additional actions needed to support mitigation efforts. The CDI would also have the same deadline to develop guidelines for state and local agencies to aggregate and release wildfire risk data through a data-sharing platform, as outlined in Senate Bill 616.
These legislative proposals align with previously announced reform measures, including the FAIR Plan Stabilization Act, the home-hardening California Safe Homes Act, and claims-handling reforms.
Insurance Commissioner Ricardo Lara has supported many of the proposals, emphasizing the need for significant action on wildfire recovery and mitigation efforts.
“I will not shy away from this moment and will continue to advocate for consumer protection and the restoration of our state’s insurance market,” Lara said in a statement. “Bold actions will yield bold results.”
Attempts to obtain comments from the Personal Insurance Federation of California and several lawmakers sponsoring the bills were unsuccessful.
The wildfires that ravaged Los Angeles last month are considered to be the most damaging wildfires in the history of the state. California Gov. Gavin Newsom on Friday sent a letter to Congress asking the body to approve about $40 billion in aid to help the area recover from the wildfires.
“Make no mistake, Los Angeles will use this money wisely,” Newsom wrote. “California will ensure that funds will serve individuals, communities, property owners and businesses that suffered losses from these devastating fires.”
