Newsom Signs California Home Insurance Protections but Vetoes Two Wildfire Claims Bills

If you own a home in California, the rules around losing your policy and filing a claim just shifted, though not as far as many wildfire survivors had hoped.

On Sunday, Sept. 27, California Gov. Gavin Newsom acted on hundreds of bills, according to his office’s legislative update for that day. Several of them deal with home insurance, a major worry in a state where many homeowners have struggled to find or keep coverage after a series of destructive wildfires.

The bills that were signed

SB 1301, by state Sen. Ben Allen, deals with nonrenewals. A nonrenewal is when an insurance company decides not to continue your policy when its term ends. It is different from a cancellation, which ends a policy midterm. According to the Los Angeles Times, the new law requires insurers to give clear reasons for a nonrenewal, generally requires 90 days’ notice, and gives homeowners a chance to fix the problem first. If an insurer is concerned about, say, overgrown brush or an aging roof, the homeowner now has a clearer path to address it before losing coverage.

SB 876, by state Sen. Steve Padilla, doubles penalties for unfair claims practices during declared emergencies and requires insurers to pay restitution directly to policyholders for unfair settlements, according to the Times. Restitution means paying back money someone was wrongly denied. Before, penalties often went to the state rather than to the people who were shortchanged.

AB 69 and AB 1680 make changes to the California FAIR Plan, according to the governor’s office. The FAIR Plan is the state’s insurer of last resort, a pool backed by private insurers that offers basic fire coverage to people who can’t get a regular policy. Its enrollment has grown sharply as traditional insurers have pulled back from high-risk areas, which makes its rules increasingly important to ordinary homeowners.

The bills that were vetoed

SB 877, by state Sen. Sasha Renée Pérez, would have required insurers to show homeowners the original estimate of their loss and any later changes to it. SB 878, also by Pérez, would have required insurers to give written claim decisions and pay interest when payments were late.

Newsom said the two bills would “codify portions of existing, unrelated regulations that are unnecessary at this time,” according to the Times. MyNewsLA reported that he pointed to regulations from state Insurance Commissioner Ricardo Lara as the reason the bills weren’t needed.

Why the vetoes drew criticism

Wildfire survivors and consumer groups disagreed with the governor’s reasoning. Joy Chen, who leads a network of fire survivors, told MyNewsLA: “We paid our premiums for years. Then disaster came, and too many of us discovered that having insurance and getting the benefits we paid for are two very different things.”

Carmen Balber of the group Consumer Watchdog argued that nothing in state law requires insurers to share revised loss estimates and that existing late-payment interest rules lack teeth. For homeowners rebuilding after a disaster, those details can determine whether a claim covers the true cost of repairs or leaves a gap they must fill themselves.

Other money-related bills signed the same day

The governor’s office also announced that Newsom signed AB 1349, which requires full refunds for canceled or postponed events and bans speculative ticket sales. A speculative ticket is one a reseller lists before actually owning it. He also signed SB 923, which expands the right to have your personal information deleted and limits changes to privacy settings without your consent, and AB 2409, which bars California public officials from issuing meme coins, a type of cryptocurrency.

How to protect yourself at renewal

If your policy is coming up for renewal, read every notice from your insurer closely rather than setting it aside. Under SB 1301, you should get a clearer explanation if your insurer decides not to renew, which may give you time to make fixes or shop for other coverage. Mark the date on your calendar and start comparing options early. Finding a new policy can take weeks in a tight market, and a lapse in coverage could put you in violation of your mortgage terms.

An independent insurance agent, who works with multiple companies, can be especially useful when coverage is hard to find. If you end up on the FAIR Plan, ask about a difference-in-conditions policy, which can fill in coverage the FAIR Plan doesn’t provide, such as theft or water damage.

How to protect yourself if you ever file a claim

The best time to prepare for a claim is before you need one. Take photos and videos of every room, open closets and drawers, and record serial numbers for major electronics and appliances. Store copies in the cloud so they survive if your home doesn’t. Save receipts for significant purchases and renovations.

If you do file a claim, keep a written log of every call and email with your insurer, including dates, names and what was said. Because SB 877 was vetoed, it may help to ask your insurer in writing for copies of every estimate, including the original and any revisions. Getting an independent contractor’s estimate can also help you judge whether an offer is fair.

Review your coverage every year

Construction costs can rise quickly, especially after a regional disaster when demand for contractors surges. Review your policy limits annually and ask whether your policy includes extended replacement cost, which pays a set percentage above your limit if rebuilding costs more than expected. Also confirm how much additional living expense coverage you have, since it pays for temporary housing while your home is repaired.

Not in California? Many states are debating similar rules as climate-related losses rise. The same habits, documenting your belongings, reading renewal notices carefully and reviewing your limits every year, can protect you no matter where you live.