The California Department of Insurance published a press release announcing the signing of the Disaster Recovery Reform Act, which provides consumer protection for homeowners and renters recovering from wildfires and other disasters.
The Disaster Recovery Reform Act requires insurers to maintain a disaster recovery plan for handling claims promptly following a disaster. The Department will review each plan in advance.
During a declared emergency, penalties are doubled for violations of fair claims practices. If an insurer has engaged in unfair claims settlement practices, the act requires that it pay restitution to the policyholders. Insurers are also required to send insureds a status report within 15 days when a new adjuster has been assigned to prevent delays.
The act requires a mandatory offer of extended replacement cost coverage and additional living expenses coverage when a policy is written. Finally, building code upgrade coverage must be applied at the time of the rebuild, not the time of loss, to ensure the most recent rules are applied.
The press release can be found here.
Ray Sugrim
Ray Sugrim is an Insurance Editor with FC&S Expert Coverage Interpretation, a division of National Underwriter Company and Arc Network. Ray is responsible for helping develop and edit content for subscribers. Ray is a St John’s University graduate with a degree in Risk Management & Insurance and is a CPCU candidate.