INSURANCE REFORM WILL BETTER PROTECT CALIFORNIANS FROM LOSING COVERAGE
The following information was released by California State Senator
In the face of a difficult insurance market, SB 1301, authored by Senator
"Californians are facing more expensive and fewer insurance options to keep their families secure right now, exacerbating the broader affordability crunch we're all feeling," said
Insurers are required to send a "nonrenewal" notice to inform a policyholder that they will not continue covering their property beyond the current contract term. Californians have faced the fourth highest rate of being nonrenewed in the country, and these notices often provide little-to-no detail explaining the decision. This can leave people scrambling to find new coverage, often forcing them onto the heavily subsidized FAIR Plan which has more-than tripled its total exposure since 2022.
SB 1301 requires insurers to explain why they are dropping a policyholder, including by identifying a specific risk to the property, and then provide an opportunity for the policyholder to maintain their coverage by addressing the risk to meet the insurer's underwriting standards.
Such transparency will help consumers contest documented instances of faulty reasoning for nonrenewal, such as mold or algae on a roof that never actually existed, as well as guide property owners to take necessary steps that will lower the overall risk of their property.
The new law also extends the required timeline to provide the nonrenewal notice before dropping a policyholder to 90 days, with additional extensions for people who are renovating their property to address the risk. The extended timeline will provide Californians with more time to fix their property in order to maintain their policy, or else provide a better opportunity to shop the open market for new coverage before they must resort to the FAIR Plan.
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"Across
SB 1301 additionally prohibits nonrenewals for reasons based solely on if the policyholder:
Inquired about an existing claim.
Filed a claim that is not payable or within their deductible.
Filed a claim that is not covered by their policy.
These consumer protections will take effect beginning


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