Daily California P&C Insurance News

Senate Bill 876, the Disaster Recovery Reform Act, requires insurers to submit disaster recovery plans for claims handling and doubles penalties for fair claims violations during emergencies. It also expands policy limits for living expenses and mandates quicker upfront payments for total losses to aid wildfire survivors.

A new suite of laws effective January 1 promotes wildfire safety and consumer protections by requiring insurers to pay 60% of contents coverage limits up to $350,000 for homes lost in qualifying disasters. The legislation increases oversight and convenience amid rising climate-driven natural disasters making insurance costlier.

California’s Sustainable Insurance Strategy finalized rate adequacy reforms in December 2024, allowing faster rate approvals, catastrophe modeling, and reinsurance cost inclusion to encourage more underwriting. Farmers Insurance plans to expand to 300,000 new policies in distressed areas in early 2026 due to these changes.

Fire victims from the Eaton and Palisades fires report delays and disputes with insurers like State Farm, exacerbating recovery challenges and leading to depleted savings and mental health strain. Los Angeles County has opened an investigation into State Farm for alleged delays, underpayments, and denials.

US P&C insurers, including those in California, expect stable 2026 results from improved personal and commercial lines despite softening rates and competition, following 2025’s benign hurricane season. The Los Angeles wildfires caused $40 billion in insured losses, primarily borne by regional insurers without major reinsurance triggers.