Daily P&C Insurance News
California Edition

Senate Bill 876, the Disaster Recovery Reform Act, requires insurers to submit disaster recovery plans for claims handling during emergencies and doubles penalties for fair claims violations. The legislation expands policy limits for living expenses, mandates upfront payments for total losses, and requires offers of extended replacement cost coverage to aid wildfire survivors.

California home insurance premiums are projected to rise 20% or more through 2025 due to reinsurance costs, wildfires, and recent wet weather increasing flood and landslide risks in Southern California. Regulatory changes now allow better use of catastrophe models, potentially leading to higher rates in high-risk areas but more carrier participation long-term.

The California Department of Insurance released its 2026 guide outlining key laws for property claims adjusters during disasters, including extended timelines for replacement cost recovery up to 36 months and advance payments for living expenses. The guide details special provisions triggered by states of emergency, such as 60-day premium grace periods and mandatory estimate sharing.

New laws effective January 1, 2026, require insurers to pay 60% of contents coverage limits (up to $350,000) upfront for total home losses in qualifying disasters while promoting wildfire safety and consumer protections. The legislation addresses climate-driven insurance challenges by increasing oversight, transparency, and convenience for policyholders.

California Insurance Commissioner Ricardo Lara approved a 6.9% rate increase for Mercury Insurance and CSAA over the holidays amid ongoing market challenges. Critics argue private insurers’ restrictions are leaving homeowners captive to the state FAIR Plan while rate hikes continue.