California tightens claims rules
California lawmakers are proposing tougher rules on how insurers handle fire-related claims, including higher penalties for unfair practices and requirements for formal disaster-recovery plans. These bills would also speed delivery of claim documents and force insurers to report payout‑compliance data beginning in 2028. (programbusiness.com)
California lawmakers are advancing three bills that would make insurers move faster on wildfire claims and face steeper penalties when they do not. (msn.com) The package centers on Senate Bills 876, 877, and 878 in the 2025-26 session. Senate Bill 876 would require residential property insurers to file disaster recovery plans and would double penalties during declared emergencies for violations of fair-claims rules. (insurancejournal.com) Senate Bill 877 would shorten the time insurers have to provide claim-related documents, and Senate Bill 878 would require insurers to report payout-compliance data starting in 2028. Trade coverage of the bills says the reporting would give regulators a way to compare how carriers perform after major fires. (yahoo.com) The push follows complaints after the January 2025 Eaton and Palisades fires in Los Angeles County, where survivors said payouts were delayed, smoke claims were disputed, and adjusters changed repeatedly. CalMatters reported those complaints were still surfacing a year later. (calmatters.org) California’s insurance commissioner opened a formal investigation into State Farm in June 2025 over its handling of claims from those fires. Associated Press reporting said State Farm had received about 13,000 fire-related claims and said it had paid roughly $4 billion. (spectrumnews1.com) The bills land in a state already rewriting wildfire insurance rules on several fronts. California’s Department of Insurance has also been tracking wildfire claims and pushing carriers to speed advance payments after major losses. (insurance.ca.gov) Consumer advocates have backed the new claims bills as a way to force basic deadlines and clearer records after disasters. Insurance industry groups have warned that adding mandates and penalties could raise operating costs in a market where carriers have already pulled back from some California neighborhoods. (programbusiness.com) The immediate question is whether lawmakers turn post-fire complaints into enforceable deadlines before the next disaster season. The bills are still moving through Sacramento, where committees will decide how far California goes in policing wildfire claims. (realtor.com)
