The California Department of Insurance is supporting legislation that would revise post-disaster regulations for insurers, including expanded limits for additional living expenses, mandated upfront payments and increased penalties for violations of fair claims practices.
Senate Bill 876, sponsored by Sen. Steve Padilla, D-District 18, comes as wildfire victims have called on state lawmakers to accelerate claim payments and processing, according to the insurance department.
CDI data through Nov. 17, 2025, shows wildfire claims have topped $22 billion, with payments reported from admitted insurers, the California FAIR Plan and surplus lines carriers.
"The last 12 months have made clear the urgent need to update and modernize the claims process to better protect homeowners devastated by these wildfires," Padilla said.
Read more: California wildfire claims top $22 billion
Under the proposed legislation, insurers would be required to develop disaster recovery plans outlining their procedures for handling claims and meeting established timelines. Carriers would have until April 2027 to submit these plans, with updates required every two years.
The bill establishes reporting requirements for residential property insurers following a declared state of emergency. Insurers would need to report losses, claims and estimates of total incurred losses to the CDI within 15 days if there is a covered loss.
SB 876 would double additional living expense limits after an emergency declaration. Payment timelines for total loss claims would also be codified, with actual cash value payments due within 30 calendar days from the date of loss.
Commissioner Ricardo Lara has taken separate actions to protect policyholders during disasters. In December, he ordered insurers to maintain residential property coverage for more than 14,800 policyholders affected by the Pack Fire following a gubernatorial emergency declaration.
Since 2019, Lara's moratorium actions under a law he authored as a state senator have protected more than 4 million homeowners.
"There is real fear, frustration and misinformation right now with the pace of recovery," Lara said.
