Reinsurance News

Consumers urged to review new wildfire insurance protections

29th July 2021 - Author: Katie Baker

As the Californian wildfire season starts, Insurance Commissioner Ricardo Lara is alerting consumers to review the new insurance protections which have come into effect for the summer wildfire season.

Last year, Commissioner Lara sponsored Senate Bill 872, which was to create a series of new protections for wildfire survivors despite opposition to the measure by the insurance industry.

The bill states that insurers will no longer be able to deduct the land value when paying an insurance claim if a wildfire survivor chooses to relocate rather than rebuild their home at the same location.

After recent major wildfires, some insurance companies refused to include the value of land when paying a total loss claim, reducing the total payout by tens to hundreds of thousands of dollars. This change gives homeowners more choices in whether to rebuild or relocate their new home.

Residents under mandatory evacuation for wildfire, even if they suffer no damage to their home, will receive additional living expenses for at least two weeks, with extensions for good cause.


Insurers will no longer be able to restrict additional living expenses if a home is rendered uninhabitable due to a wildfire or other covered peril, even if the damage is not to the property itself.

However, they will be able to provide a reasonable alternative remedy that addresses the property condition, such as a portable generator in the case of downed power lines or a portable water source.

In cases of a total loss related to a state of emergency, insurance companies must provide an advance payment of no less than four months of additional living expenses if the consumer requests it, with additional benefits due after the advance period upon proper documentation.

Wildfire survivors will no longer have to fill out company-specific inventory form for lost contents and can include groupings of categories, rather than having to list individual items.

Insurance companies must offer a 60-day grace period on payment of policy premiums for properties located within the affected area defined in the declared state of emergency.

These reforms are the result of input received from past wildfire survivors that Commissioner Lara championed in the State Legislature.

Lara said: “I listened to the uphill battles that wildfire survivors face in their efforts to recover and rebuild their lives and I took on the insurance companies.

“These new insurance protections for wildfire survivors will mean larger payouts for some claims and less red tape from insurance companies.”

Senator Bill Dodd said: “With the frequency and devastation of wildfires in California, it’s essential that people who suffer damage or loss of a home get the coverage they deserve from their insurance company.

“It’s why I wrote my legislation, which targets unnecessary delays for assistance and streamlines the claims process, bringing peace of mind to people rebuilding their lives. I appreciate Commissioner Lara for sponsoring these important changes.”

Senator Monique Limón commented: “The costs of rebuilding a home can sometimes be astronomical. That is why I authored AB 2756 – homeowners must know that they have the right amount of coverage to begin to rebuild their lives after a wildfire.

“Protecting consumers and providing transparent insurance information is the right thing to do as California continues facing wildfires and works towards reducing risks. I am pleased to see the implementation of this law and its impact on protecting the most at risk.”

Richard Bloom said: “Record wildfire losses mean that it is more important than ever that consumers throughout California have a clear, transparent understanding of their insurance policies.

“My team and I are proud to have played a role in the passage of last year’s AB 2756, which protects consumers from questionable insurance practices while also helping consumers and homeowners build back resiliently. As climate change worsens and our wildfires worsen, preparation for wildfires and fire resiliency are imperative.”

Commissioner Lara added: “An insurance policy is a contract – and my goal is to make sure insurance companies are holding up their end of the deal in the wake of a disaster so survivors get the benefits they deserve.

“We want wildfire survivors to recover and rebuild as quickly as possible. We will continue to listen to the needs of California consumers and I will continue to work with the Legislature and Governor to act on their concerns.”

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