Californians Now Have a Right to Demand Transparency Before Insurance Can Drop Them
On Sept. 30, a press release announced that a new law had been signed in California, giving homeowners “new paths” to keeping their homeowners insurance. According to the release, which was written by Consumer Watchdog, SB 1301 has finally been signed into law.
SB 1301 gives homeowners more protection when it comes to what mitigation or repairs need to be completed in order to qualify for a homeowners insurance renewal. It will also require that homeowners receive more advance notice before they lose coverage, which has to include specific disclosures about what could cause a policyholder to be dropped.
The law was authored by Senator Ben Allen and sponsored by Consumer Watchdog. It was later signed by Governor Gavin Newsom.
According to the press release, this will be a huge win for Californians, since Consumer Watchdog says this is a protection over which 90 percent of residents would like to see in place. Here’s what we know.
Californians Face Fewer and More Expensive Insurance Options
According to Consumer Watchdog, Californians have been struggling with fewer and more expensive homeowners insurance options. “California consumers should not have to live in fear that they’ll be next to lose home insurance,” Carmen Balber, executive director of Consumer Watchdog, said in the press release.
“SB 1301 gives families more notice before losing coverage and clear instructions on what it will take to stay insured. For the first time, consumers will have a right to know the rules upfront so they can act on them. These critical changes will help keep families home and stem the insurance crisis.”
Almost 1 Million Californians Have Lost Their Homeowners Insurance
The press release went on to describe the issue Californians face when it comes to insurance, noting that almost a million people lost their existing policies and were left with other options, which included the FAIR Plan and “unregulated” options.
That’s likely why Consumer Watchdog pointed to a Consumer Rights Survey from FM3 Research, which found more than 90 percent of those polled wanted better protections for homeowners, especially when it comes to nonrenewal notice and how much time is given for repairs.
What Does the New Law Do?
Senator Allen wrote about SB 1301 on his official website, saying that the changes will take effect on Jan. 1, 2028. Some of the new protections homeowners will have include clear information on why policies are being considered for nonrenewal, which will have to include the specific risks in question.
This will also require insurance companies to give homeowners a chance to remedy the issue in a way that meets the insurance company’s underwriting standards. This will afford homeowners at least 90 days’ notice and require extensions for people who are actively working to remedy the issue.
According to The Zebra, homeowners in California pay an average of $2,211 per year for insurance policies. While that isn’t as much as some other states (Colorado reportedly averages $4,586 a year), Californians do face many challenges when it comes to keeping those policies. Hopefully, SB 1301 can help.
