Wildfire Insurance Bill Signed by California Governor

August 28, 2018

California Gov. Jerry Brown on Monday signed into law a bill that is intended to combat what are believed underinsurance issues revealed by 2017 wildfires.

AB 1797 by Assemblyman Marc Levine, D-Marin County, is expected to create a requirement for insurers writing residential property insurance to conduct a replacement cost estimate on an every other year basis.

This would ensure policy holders are covered with current and timely estimates that accurately reflect their property’s value, according to the bill’s supporters.

AB 1797 will take effect July 1, 2019.

“We heard from wildfire survivors about the devastating realization of being underinsured due to inaccurate or outdated replacement cost models used by insurers,” Levine said in a statement. “After facing the most destructive wildfires in state history, Californians should not have to begin the recovery process underinsured. California has prioritized protecting consumers and helping prevent underinsurance.”

Another wildfire insurance bill by Levine was signed by Brown early last month.

AB 1799 is designed to standardize what information about policies insurance companies are required to provide to fire victims after a loss. The bill requires insurers to provide the policyholder with all the information they need to understand the coverage they paid for, including the full insurance policy, any endorsements to the policy, and the policy declarations page.


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Latest Comments

  • August 30, 2018 at 1:21 pm
    retired risk manager says:
    The whole scenario in the wildfire areas violates the concept of insurance. Insurance is for transferring the risk when a claim MAY happen. When the chance of loss nears 100%,... read more
  • August 30, 2018 at 11:43 am
    truevalues says:
    Reality Check is spot on, selling price point rather than true coverage is the problem. Manipulating the data points to hit predetermined coverage and costs. However, having a... read more
  • August 29, 2018 at 5:22 pm
    Jstlsle says:
    Agree with Reality Check; carriers use their own RC tool and none of the carriers come out with the same end replacement value, this is a huge problem. However, when we revie... read more

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