SACRAMENTO, Calif. – California legislators are advancing three bills to accelerate home insurance claims processing and enhance insurer accountability, addressing persistent disputes over wildfire damage. The proposed reforms aim to mitigate delays and denials that have hindered policyholders rebuilding after significant fire events.
Assembly Bill 2868, Assembly Bill 2869, and Senate Bill 1045 collectively seek to streamline the claims process. AB 2868, introduced by Assemblymember Marc Berman, mandates that insurers provide a clear explanation for any claim denial within 30 days. AB 2869, also from Assemblymember Berman, would require insurers to pay undisputed portions of claims within 30 days, preventing delays for policyholders needing immediate funds for repairs. SB 1045, authored by Sen. Bill Dodd, focuses on increasing transparency regarding additional living expenses (ALE) coverage, a critical component for displaced homeowners. These legislative efforts follow years of complaints from fire victims regarding slow claim resolutions and inadequate payouts.
For restoration contractors, these reforms could translate to a more predictable and potentially faster workflow. Expedited claim payments mean homeowners have quicker access to funds, enabling them to initiate repairs sooner. This could reduce the duration of projects stalled by insurance disputes and potentially increase the volume of active restoration work. Homeowners, often overwhelmed by the aftermath of disasters, stand to benefit from clearer communication and more timely financial support, easing the burden of recovery. Insurers, while facing increased regulatory scrutiny, may find that clearer guidelines and faster processing reduce long-term litigation costs and improve policyholder satisfaction.
The legislative push comes amid a broader crisis in California's insurance market, characterized by rising premiums and some insurers withdrawing from the state due to wildfire risks. California Insurance Commissioner Ricardo Lara has also been working on regulatory reforms, including allowing insurers to factor forward-looking climate models into their rate-setting, a move intended to stabilize the market. However, these legislative bills specifically target the post-disaster claims experience, aiming to protect consumers directly affected by wildfires. Previous efforts by consumer advocates have highlighted systemic issues in how claims are handled, particularly after large-scale events like the Camp Fire and the Dixie Fire.
The three bills are currently moving through legislative committees. If passed by both the Assembly and Senate, they would proceed to Gov. Gavin Newsom for signature. The legislative session is ongoing, with key committee hearings and floor votes anticipated in the coming months. Stakeholders, including consumer advocacy groups, insurance industry representatives, and restoration professionals, are closely monitoring the progress of these proposals, which could significantly alter the landscape of post-disaster recovery in California.
Source: Insurance Journal. Original reporting: https://www.insurancejournal.com/news/west/2026/04/15/865907.htm