Insurance relief measures for California fire victims yanked or gutted in Legislature

June 01--The state Legislature will provide little relief to North Bay fire victims who have found themselves underinsured and overly burdened by their insurance policies after two proposed bills encountered strong lobbying in Sacramento from the powerful property-and-causality industry.

State Sen. Mike McGuire, D-Healdsburg, on Thursday night said he declined a compromise with the industry, a mandate he said was laid down by Sen. Steven Glazer, D-Orinda, the insurance committee chairman, to advance the legislation.

McGuire's bill (SB 897) would have made insurance companies pay out at least 80 percent of the maximum limit under a homeowner's personal property coverage without requiring policyholders to itemize their losses.

When insurance companies insisted on amendments that "watered down the bill close to useless, we rejected them," McGuire said.

"This fight is far from over and there is no way in hell that we are going to back down," McGuire said. Other communities around California one day will suffer similar wildfire damage, "which is why this state may eventually need to put this on the ballot for voters to decide."

The McGuire bill was a response to local fire survivors who argued that compiling a list of lost items proved too burdensome and traumatic as they attempted to rebuild in the aftermath of the nation's costliest wildfire.

State Insurance Commissioner Dave Jones also blasted the insurance industry for their position. "Insurers opposing SB 897 have shown their true colors in efforts to defeat this common-sense legislation -- their priority is profit over the needs of their policyholders who have been through hell," Jones said in a statement.

McGuire's decision follows the Senate passage on Tuesday of a watered-down bill (SB 894) sponsored by Sen. Bill Dodd, D-Napa. The changes mean the legislation will have less impact for current fire survivors.

Dodd's bill, which now heads to the Assembly, would increase insurance coverage for rental living from two years to three -- a crucial provision because most builders believe that not all the North Bay homes will be rebuilt by October 2019.

It also requires companies to renew policies for at least two years. Current law allows for only one year, after which the carrier could cancel the policy.

As originally proposed, the Dodd legislation would have applied retroactively to July 1, 2017, to benefit the almost 6,200 North Bay homes lost in last year's wildfires.

But to secure passage, Dodd had to remove the retroactive provisions to all but one item -- the extended time before carriers can cancel policies.

An earlier version of the Dodd bill also would have allowed policyholders to combine their homeowner policies for different coverage areas -- such as their personal property, living expenses and outside buildings -- to pay for their primary dwelling. The measure was in response to the thousands of fire victims who have found themselves underinsured, some by hundreds of thousands of dollars.

But Dodd was forced to narrow that language so that the combination of insurance payments would apply to actual losses accrued, not the maximum amount listed under each line item of a policy.

As the Dodd bill heads to the Assembly, proponents fear that the last remaining retroactive provision will be removed because of industry lobbying.

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