As Californians are once again threatened by wildfires, Insurance Commissioner Ricardo Lara is making new insurance protections effective for the summer wildfire season that increase payouts and evacuation benefits for wildfire survivors. The reforms are a result of input received from past wildfire survivors.
The bill, Senate Bill 872, was sponsored by Lara and signed by Governor Gavin Newsom last year. The bill creates several protections for wildfire survivors, despite the insurance industry's objections to the bill.
The bill prevents insurance companies from deducting the land value when paying an insurance claim if a wildfire survivor chooses to relocate rather than rebuild their home at the same location. This will lead to higher payouts for consumers, and will allow them to choose whether they want to rebuild or relocate their new home.
The bill also gives residents who are under mandatory evacuation from wildfires, even if they suffer no damage to their home, additional living expenses for at least two weeks. Extensions will be allowed for good cause.
The bill prevents insurers from restricting additional living expenses if a home is rendered uninhabitable due to a wildfire or other covered peril, even if the damage is not to the property itself.
In cases of a total loss related to a state of emergency, insurers must provide an advance payment of no less than four months of additional living expenses if requested by the consumer with additional benefits due after the advance period upon receipt of proper documentation.
Wildfire survivors do not have to use a company-specific inventory form for lost contents and can include groupings of items instead of having to list individual items.
Lastly, insurance companies must offer a 60-day grace period on payment of policy premiums for properties located within the affected area defined in the declared state of emergency.
Editor's Note: The frequency and devastation of wildfires in California are both increasing. This bill not only helps protect consumers, but it gives them the opportunity to rebuild in an area less prone to wildfires.