Sen. Dodd’s Insurance Claims Streamlining Bill Clears Legislature

SACRAMENTO – A proposal from Sen. Bill Dodd, D-Napa, that would streamline residential insurance claims for victims of disasters such as wildfires passed the Legislature with bipartisan support.

“This latest round of destructive wildfires underscores the need to support Californians suffering through these all-too-familiar disasters,” said Sen. Dodd. “Above all, they should not be hit with unnecessary insurance company delays as they seek coverage for living expenses and temporary housing. This bill brings peace of mind, ensuring people aren’t buried under mountains of insurance company paperwork.”

Senate Bill 872, sponsored by Insurance Commissioner Ricardo Lara, expands the definition of additional living expenses that must be paid to homeowners for losses incurred in a state of emergency. Upon submission of a claim, it requires an advance payment of no less than four months for costs such as housing, furniture rental and transportation. Also, it mandates an advance payment of no less than 25 percent of a policy limit for lost contents without submission of an inventory form.

“With over 620 wildfires currently burning throughout the state, this legislation is more important than ever to help guarantee that future wildfire survivors have the time and resources they need to recover,” said Insurance Commissioner Ricardo Lara. “I thank Sen. Dodd for authoring SB 872, which cuts red tape for survivors of forthcoming wildfires to access insurance benefits, and I thank the Legislature for recognizing the urgent need for this legislation.”

The bill, coauthored by Sen. Mike McGuire, D-Healdsburg, and Assemblymember Jim Wood, D-Santa Rosa, makes insurers give homeowners a 60-day grace period for payment of residential premiums after an emergency. Also, insurance companies will be barred from deducting the land value from payouts for those who build on new lots.

SB 872 now heads to Gov. Gavin Newsom for a signature.