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California doubles disaster penalties in residential property insurance overhaul
The law signed Sept. 27, 2026 takes effect Jan. 1, 2028 and requires insurers to retool policy forms, claims protocols, and data reporting by that deadline.
California has enacted a major overhaul of residential property insurance rules, doubling disaster penalties and adding new requirements for insurers, including mandatory extended coverage offers and disaster response planning. Insurance Business reports the changes are contained in Senate Bill 876, which also expands the California Insurance Commissioner’s authority for restitution.
The bill raises civil penalties to as much as $20,000 per willful act during a state of emergency, and it grants new restitution powers to the commissioner, according to Insurance Business. The measure also amends more than a dozen sections of the California Insurance Code.
Insurance Business says the update requires every carrier writing California homeowners coverage to retool policy forms, disclosures, claims protocols, and data reporting. The law was signed Sept. 27, 2026, with nearly all provisions operative Jan. 1, 2028, giving insurers a 15-month compliance runway.