A trio of insurance reform bills concerning insurer disclosures to customers and late claim payments has advanced in the California State Senate. A fourth bill that would have barred insurance carriers from refusing to cover homes that meet minimum home hardening and wildfire mitigation standards was rejected by the Senate Insurance Committee.

Senate Bill 1301

The first of the bills that advanced, SB 1301, states that insurers that elect to nonrenew a homeowners' policy or lower its limits or coverages must:

  • Clearly explain the reasons for its decision to the policyholder;
  • Refer to the specific provisions in the insurer's underwriting guidelines that justify its decision; and
  • Provide policyholders with all information the carrier used in making its decision, including any images and documentation.

The bill would also expand notification periods for insurers. California law currently requires insurance companies to provide nonrenewal notices at least 75 days before a policy expires or at least 45 days before if the insurer plans to renew a policy. If passed, SB 1301 will require insurers to provide renewal notices at least 90 days before a policy's expiration and to give at least 180 days' notice if they plan to nonrenew a policy.

If passed, the law becomes effective July 1, 2027.

Senate Bill 877

If passed, SB 877 will require insurance carriers to share every version of each document it possesses related to a claim with the claimant within 15 calendar days of creating the document. They will also be required to disclose the full name and title of every person who created a document, ordered its creation, and reviewed or approved it.

If passed, the law becomes effective January 1, 2027.

Senate Bill 878

SB 878 would require insurance companies that miss deadlines for responding to or providing an approval or denial of a claim to pay an annual 20% penalty to the affected policyholders on top of the claim amount and any reasonable and necessary attorney's fees.

The three bills approved by the California Senate's Insurance Committee will now be sent to the Senate Appropriations Committee, which will next meet on May 4.

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