California’s Push to Speed Up Wildfire & Other Disaster Claims

Senate Bill 876 has been introduced in the California Legislature. The goal is to make it easier and faster to file a claim for a home destroyed by a disaster. At the top of the list is one burning to the ground during a wildfire.

California Insurance3 Commissioner Ricardo Lara supports the bill and testified last week to the Senate Insurance Committee saying this one needs to be passed. And if it passes, under some circumstances an insurance company would have to make a payout within 30 days of a home being destroyed. The bill will also require insurers to have a special group of employees focused on those claims.

Lara’s support hasn’t set well with insurers and insurance industry groups who see it harming the industry and consumers.

“Do you really think I would once again put my department, my staff, or myself through the political attacks, the personal pressure, if I believe that this bill would actually harm the market?” Lara told the committee. “Of course not.”

Lara — and supporters like Amy Bach of the consumer advocacy group, United Policyholder — say consumers have faced delays for years while trying to get a claim settled after a disaster.

“Everything that this bill takes aim at are the exact same problems that consumers have been bringing to our organization,” Bach said.

The bill has moved out of the Insurance Committee but it didn’t get out of committee until sponsor, Democrat Sen. Steve Padilla reluctantly agreed to remove a part of the bill requiring companies to guarantee paying the cost of repairing or replacing a home destroyed by a disaster.

“The broad intent here,” Padilla said, “is to bring the claims process for people who are suffering the worst experience of their lives into the 21st century.”

Denni Ritter is a lobbyist for the American Property Casualty Insurance Association (APCIA). She says insurers oppose the bill because it will reduce their flexibility in California’s “fragile” insurance market. And Ritter said this even after Padilla’s guarantee was removed.

“We’re really concerned about the cumulative and unintended consequences,” she said.

The commissioner agrees this bill — if passed — will increase costs to companies. Lara said he wants he and his staff to sit down with legislators, insurance companies and consumer groups to “figure out what are the things that we’re willing to do to increase consumer protection, and really be open about how this is gonna impact the market.”

Source link: Sacramento Bee — https://bit.ly/4sBM7Zf