California Passes Handful Bills Aimed at Protecting Wildfire Survivors

September 21, 2018

Five bills that their proponents say will protect wildfire survivors were signed by California Gov. Jerry Brown on Friday.

The bills are aimed at addressing critical issues facing wildfire survivors including underinsurance, rebuilding, and recovery, those who authored them say.

The bills signed are Senate Bill 894, Assembly Bill 1772, Assembly Bill 1800, Assembly Bill 1875 and Assembly Bill 2594.

The bills were sponsored by California Insurance Commissioner Dave Jones.

SB 894 is intended help homeowners reduce the huge financial burden of being significantly underinsured and unable to afford to rebuild. The bill provides survivors the option to move the amount of their additional structures (Coverage B) losses to their primary dwelling (Coverage A) within their homeowner policy to help offset some of the underinsured amount in their home. Consumers only qualify for this provision if they meet three tests: 1) It is following a declared disaster; 2) They suffer a total loss; 3) They are underinsured in their primary dwelling or Coverage A.

SB 894 allows consumers facing a total loss to generally have three years to utilize their Additional Living Expenses coverage, up from the current two. SB 894 also provides homeowners suffering a total loss from a fire two renewal offers, instead of the current one.

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. AB 1772 takes effect immediately.

AB 1800 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. AB 1800 takes effect immediately.

AB 1875 addresses confusion surrounding extended replacement cost coverage, which allows property owners to purchase limits above the estimated cost to replace the home. AB 1875 would require an insurer who does not provide at least 50 percent ERC to help direct the consumer to an insurer that might. The bill also includes a provision creating a home insurance finder to help consumers locate possible residential property insurance options.

AB 2594 extends a consumer’s right to sue their insurer following a declared disaster from 12 months to 24 months, given that it now takes longer to rebuild after California’s significant fires the past few years. 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.

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