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California passes bills tightening insurers’ claims and nonrenewal rules
The package requires insurers to produce claims documents within 15 days, decide on claims within 40 calendar days, and provide six months’ notice before nonrenewing, after recent wildfire losses.
California lawmakers have passed three bills that reshape how property insurers in the state must handle claims and nonrenewals, sending the measures to Governor Newsom for signature, according to Insurance Business.
SB 877 would require insurers to provide policyholders with claims-related documents within 15 days of a request, including disclosure of each version of a loss or repair estimate, who approved changes, and why, to help homeowners understand how a payout figure was reached.
SB 878 would codify strict claims-handling timelines, requiring insurers to accept or deny residential property claims, in whole or part, within 40 calendar days of receiving proof of loss. It also would impose 20% annual interest on insurers that miss prompt-payment deadlines on undisputed claims, and require signed compliance reports to the California Department of Insurance.
SB 1301 would require six months’ notice before nonrenewing a residential property policy, along with documented reasons and, when applicable, an explanation of what repairs or changes could allow coverage to continue. The bill also bars nonrenewals based solely on a homeowner inquiring about a potential claim or filing one that was ultimately paid, as the bills are introduced amid pressure on the state’s FAIR Plan, whose total exposure reached about $768 billion by mid-2026.