Four bills designed to strengthen consumer protections for wildfire survivors have passed the Senate Insurance Committee with unanimous, bipartisan votes. AB 1772 (Aguiar-Curry), AB 1797 (Levine), AB 1799 (Levine) and AB 1800 (Levine) aim to address critical issues facing wildfire survivors including underinsurance, rebuilding, and recovery.
After losing a home or business in a fire resulting in a declared state of emergency, current law provides a policyholder at least two years to rebuild their property and receive the full replacement cost coverage they paid for. However, experience shows that two years is often insufficient time for families to rebuild the insured property. AB 1772 extends the amount of time a home or business owner has to rebuild an insured property from two to three years after a declared wildfire emergency and receive the full replacement costs to which they are entitled.
Current regulations require a complete and comprehensive estimate of the cost to replace a home when a replacement estimate is provided by the insurer, but state law does not mandate that insurers produce or regularly update a replacement cost calculation. AB 1797 would require insurers to either provide a policyholder with a full replacement cost estimate every other year or apply an inflation factor to the dwelling limit at each renewal and clearly offer the consumer the option to obtain a full replacement cost estimate.
AB 1799 would require insurers to provide one free, full set of certified policy documents, including any endorsements, and the policy declarations page within 30 calendar days of a covered loss, upon request of a policyholder.
The 2017 fires also revealed that some insurers were withholding the additional Extended Replacement Cost coverage purchased by policyholders unless the policyholder actually rebuilt on the same lot. This is against the law. In the event of a total loss, AB 1800 (Levine) would clarify the current law that an insurer must pay out the full extended replacement cost benefit covered under the provisions of a plan, regardless whether the policyholder chooses to rebuild at the same location, rebuild at a new location, or purchase an already built home.
“These common-sense bills will help Californians with their recovery after a wildfire,” said Insurance Commissioner Dave Jones. “Making sure homeowners have enough information to make informed insurance coverage decisions and have the peace of mind insurance is meant to provide is critical. I thank Assemblymembers Aguiar-Curry and Levine for authoring these bills to help future wildfire survivors.”