California Legislature Passes Reforms to Curb Insurance Claim Delays

The package includes SB 877 and SB 878, authored by Senator Sasha Renée Pérez, and SB 1301, authored by Senator Ben Allen. These measures respond to a mounting crisis where nearly one million Californians have been pushed off private insurance plans and onto the expensive, low-benefit FAIR Plan. Data from Consumer Watchdog indicates that 70% of Los Angeles fire survivors have faced significant underpayments or delays that stalled their recovery efforts.

Under the new provisions, insurers will be required to disclose original loss estimates and any subsequent revisions to policyholders. SB 878 introduces penalties for late payments on the undisputed portions of claims, while SB 1301 mandates that companies provide specific, written instructions to homeowners on how to retain their coverage before issuing a non-renewal notice. For survivors like Damon Blount and Magda Molina, who testified to the personal toll of fighting for promised benefits, these laws offer a mechanism to hold carriers to their contractual obligations. If signed, the reforms aim to restore a functional insurance market for families living in high-risk zones.