Insurance Market & FAIR Plan Reform

Reduces the time insurers must respond to disaster-area property owners seeking coverage information from 90 to 75 days. Requires insurers to provide electronic contact information to the Insurance Commissioner for disaster-related inquiries. Mandates that insurers' responses to property owners' inquiries in disaster areas must be provided free of charge.

Exempts homeowners from tree removal regulations when insurers and state fire officials identify trees as fire hazards. Requires both insurance companies and the Department of Forestry to confirm a tree poses a fire risk. Waives all state and local fees and fines associated with removing dangerous trees from residential properties.

Requires the Department of Insurance to study insurance coverage challenges facing affordable housing providers. Mandates insurers to provide data on policies, claims, and rates over the past five years. Requires recommendations to address insurance cost and access issues by December 31, 2026. Expires automatically on January 1, 2027 after the study is completed.

Establishes a state grant program to develop innovative climate-related insurance solutions through 2035. Requires testing of community-purchased insurance models to reduce costs in high-risk climate areas. Mandates progress reports to legislative insurance committees every three years starting January 2029. Prioritizes expanding insurance access for vulnerable communities most exposed to climate disasters.

Increases late filing penalties for insurance companies that fail to submit required financial statements on time. Sets an initial late fee of $800 for missed financial statement deadlines. Imposes an additional monthly penalty of $900 for continued non-compliance.

Prohibits insurers from canceling commercial property insurance in wildfire-affected areas for one year after emergencies. Requires state agencies to identify and notify insurers of protected ZIP codes within wildfire perimeters. Allows insurance cancellation if property owners are grossly negligent or if unrelated losses make risks uninsurable.

Expands California FAIR Plan insurance coverage to include manufactured homes and mobile homes. Requires insurers to offer manufactured home coverage under the same terms as traditional homes. Broadens access to basic property insurance for previously excluded residential properties.

Requires large insurers to submit annual reports on reinsurance data and catastrophic risk models starting March 2026. Extends deadlines to 180 days for filing insurance claims during state emergencies. Mandates 100% payment of personal property coverage limits during state emergencies without itemized claims. Imposes penalties up to $100,000 on insurers who fail to submit required reports.

Reduces required prelicensing education for new insurance agents from 20 to 12 hours focused on ethics and code. Eliminates fees associated with prelicensing education courses to reduce barriers to entry. Requires one hour of insurance fraud training within the ethics curriculum. Expands curriculum to include new topics like commercial earthquake risk management.

Establishes a state grant program to help low-income homeowners in high-risk areas protect their homes from wildfires. Prioritizes funding for fire-resistant roof replacements and creation of defensible space around homes. Requires the Department of Insurance to publish program performance reports every two years starting January 2027. Targets assistance to properties in high fire-risk zones that are covered by admitted insurers or the FAIR Plan.

Establishes a new state program to develop public wildfire catastrophe modeling tools for emergency planning. Provides university grants to create research centers focused on wildfire risk prediction and mitigation. Requires the Department of Insurance to publish implementation milestones and budget recommendations by 2026. Prioritizes funding for projects that benefit disadvantaged communities and vulnerable areas with insurance challenges.

Establishes new requirements for bonds given to public entities in property-related contracts. Requires public entities to agree to make direct payments to contractors or their sureties. Mandates public entities to fulfill all contractual obligations before a bond becomes effective.

Expands the State Emergency Food Bank Reserve Program to provide diapers and wipes during disasters. Authorizes food banks to receive reimbursement for purchasing and distributing diapers to eligible communities. Streamlines emergency distribution by exempting diaper purchases from standard procurement requirements. Addresses diaper costs that burden low-income families, averaging $100 per month per child.

Renames the California Pollution Control Financing Authority to reflect expanded focus on climate and capital programs. Establishes new loan programs to help small businesses comply with ADA requirements and seismic safety standards. Creates an Employee Ownership Hub to support businesses transitioning to employee-owned models. Strengthens organic waste reduction regulations with clear targets and enforcement mechanisms for local jurisdictions.

Requires annual reporting on how wildfire-related insurance cancellation bans affect California homeowners. Prohibits insurers from canceling fire insurance policies in wildfire-affected areas for one year after emergencies. Mandates insurers to adjust coverage limits when homes are being rebuilt after total losses. Requires the state to track how many affected homeowners switch to last-resort FAIR Plan coverage.

Increases penalties by up to $2,500 for deceptive insurance advertising during declared disasters. Applies enhanced penalties to commercial communications targeting disaster victims for up to 180 days. Targets for-profit companies that advertise disaster-related services using misleading government references. Protects disaster survivors from scams during the 60-day recovery period after emergencies end.

Caps public insurance adjuster fees at 15% of insurance payouts during disasters and emergencies. Prohibits adjusters from soliciting clients during active disasters or between 6 PM and 8 AM. Extends contract cancellation period to 5 days for disaster victims. Requires detailed written contracts specifying services and fees for property insurance claims.

Establishes comprehensive privacy protections for consumer data collected by insurance companies and their vendors. Requires insurers to obtain explicit consent before sharing personal data and provide clear privacy notices to consumers. Grants consumers rights to access, correct, and delete their personal information held by insurance companies. Authorizes fines up to $1 million for privacy violations and creates criminal penalties for data theft.

Reduces the time insurers must provide fire insurance policy copies after a loss from 30 to 15 days. Requires insurers to provide one free policy copy annually to customers who have not filed claims. Allows electronic delivery of policy documents during declared states of emergency.

Requires California to cover residential property insurance rate increases above 7% through 2030. Eliminates state tax on residential property insurance premiums starting January 2026. Mandates a $1 billion annual investment in fire risk reduction over four years. Requires the Department of Insurance to propose regulatory reforms by March 2026.

Requires financial institutions to pay 2% interest on insurance payouts held in escrow accounts. Applies to new home loans after January 1, 2026 and existing loans in LA and Ventura wildfire zones. Prohibits banks from charging fees that would reduce the 2% interest rate on escrowed insurance funds. Takes immediate effect to help homeowners impacted by the January 2025 Los Angeles wildfires.

Modernizes the California FAIR Plan by requiring both a website and toll-free number for insurance assistance. Removes the requirement to publish the FAIR Plan's toll-free number in telephone directories. Eliminates the mandate for the FAIR Plan to file new rate applications with the Insurance Commissioner.

Expands insurance licensing requirements to include bail agents and insurance adjusters. Requires insurers to reimburse health claims within 30 days or pay 15% annual interest. Strengthens oversight of insurance advertising, particularly for accelerated death benefits. Broadens the definition of background information that insurance licensees must report.

Removes oversight duties from the California Pollution Control Financing Authority for utility project bonds. Establishes new funding sources for the California Capital Access Fund to support small business loans. Expands financial assistance options for ADA compliance and seismic retrofitting projects. Creates a statutory lien on utility project property to secure payment of rate reduction bonds.

Expands the California FAIR Plan Association's governing committee to include the Assembly Speaker and Senate Rules Committee Chair as nonvoting members to increase oversight of last-resort property insurance. Takes effect immediately as an urgency measure to address the growing unavailability of property insurance coverage due to catastrophic wildfires. Maintains the FAIR Plan's authority to assess member insurance companies for operational costs and set coverage limits to ensure financial stability.