California Legislators Introduce Bills to Bolster Property Insurance Market
California lawmakers are responding to the state’s volatile property insurance market with new legislative proposals. According to a report from AM Best, these bills seek to broaden the coverage provided by the FAIR Plan, extend moratoriums on nonrenewals and cancellations, and establish a commission focused on enhancing community hardening programs.
Key Legislative Actions
Senate Bill 547 aims to provide stability by extending the existing one-year moratoriums on nonrenewal and cancellation of insurance policies to include commercial properties located in or near fire perimeters following a state of emergency declaration. This expansion would encompass homeowners associations, condominiums, affordable housing units, and nonprofits, as reported by the California Department of Insurance (CDI).
Senate Bill 525 seeks to broaden the California FAIR Plan’s scope to cover manufactured homes by refining the definition of “basic property insurance.”
Additionally, a new proposal calls for the creation of the Community Hardening Commission. Functioning as an independent unit within the CDI, the commission would convene at least quarterly to establish standards for wildfire community hardening and offer recommendations. It would be required to consult with various stakeholders, including the insurance sector and public safety districts. The commission must submit the new standards, alongside a report detailing additional actions to support mitigation efforts, to the legislature by July 1, 2027. Concurrently, the CDI would be tasked with developing guidelines for state and local agencies to aggregate and share wildfire risk data via a data-sharing platform, as outlined in Senate Bill 616.
These legislative initiatives complement previously announced reform measures, including the FAIR Plan Stabilization Act, the California Safe Homes Act (focused on home hardening), and claims-handling reforms.
Addressing Wildfire Recovery and Mitigation
California Insurance Commissioner Ricardo Lara has voiced support for several of the proposals, underscoring the critical need for decisive action on wildfire recovery and mitigation. “I will not shy away from this moment and will continue to advocate for consumer protection and the restoration of our state’s insurance market,” Lara stated. “Bold actions will yield bold results.”
Attempts to secure comments from the Personal Insurance Federation of California and several bill sponsors were unsuccessful.
