Consumers get extra protection to ensure adequate fire insurance coverage

SACRAMENTO – Senate Bill 1302, sponsored by Insurance Commissioner Dave Jones, was signed into law by Governor Brown on Sept. 23. Authored by Senator Mike McGuire (D-Healdsburg) the new law improves consumer awareness of their options when cancelled or non-renewed by their insurance company.

Commissioner Jones and the Department of Insurance have been very active in helping Californians impacted by the spate of catastrophic fires in our state, most prominently with the Valley and Butte fires in 2015, which caused more than $1 billion in insured losses. A series of damaging fires have continued in 2016, including the Soberanes and the Blue Cut fires.

SB 1302 requires insurers admitted to sell property insurance in California to provide non-renewed and cancelled consumers information about the California FAIR Plan. The California Fair Access to Insurance Requirements (FAIR) Plan was created through legislation to provide basic fire coverage for residential and commercial property owners who are having difficulty finding private insurance coverage.

"Protecting consumers during this damaging fire season is one of my top priorities. That's why I sponsored this legislation to ensure that consumers aren't left in a lurch when their insurance company cancels or non-renews their home insurance policy. These reforms will provide consumers in high risk fire areas relevant information about their options. We must do all we can do to make sure consumers can protect their homes. I thank Governor Brown for signing and Senator McGuire for authoring the bill."

Many consumers facing cancellation or non-renewal of their homeowners' policies are unaware of the FAIR Plan. State law allows insurers to decline to write or renew property or home insurance and some insurers are doing just that where there is wildfire risk.

The new law took effect immediately upon the Governor's signature. The bill had a wide range of supporters, including the Consumer Federation of California, the California Professional Firefighters, and the California Association of Realtors.