P&C Insurance Daily

California’s new laws transform wildfire claims handling, requiring faster contents payments (60% of limits capped at $350,000 without itemized lists) and expanding non-renewal protections to businesses and HOAs. The laws also introduce building code upgrade coverage requirements, mitigation grants through the California Safe Homes Act, and liquidity tools to stabilize the FAIR Plan’s ability to pay catastrophic claims.

SB 495 eliminates the requirement for wildfire survivors to submit detailed inventories of destroyed belongings to receive reimbursement for personal contents. Insurers must now pay 60% of contents coverage limits (capped at $350,000) automatically, with the option for customers holding detailed lists to receive full 100% reimbursement.

California insurers are expected to implement approximately 16% rate increases by the end of 2026 as they attempt to recoup the $41 billion in losses from the 2025 Los Angeles wildfires. Despite the anticipated increases, the state’s regulatory environment and political pressures of an election year make it unlikely that actual rate increases will exceed this projected figure.

U.S. property-casualty insurers are entering 2026 with record capital surpluses and facing increased competitive pressure and abundant reinsurance capital, creating downward pricing pressure across the market. While property insurance rates are expected to remain flat to lower overall, businesses in high-catastrophe areas will continue navigating a hard market with fewer insurers and more stringent policy terms.

Multiple states are implementing coverage changes in 2026 designed to stabilize premiums and improve consumer knowledge about coverage and risks, with particular focus on wildfire-prone areas. The Business Insurance Protection Act (SB 547) extends the one-year non-renewal prohibition that homeowners receive after fires to businesses, HOAs, condominiums, affordable housing units, and nonprofits.