Board hearing review: members plan follow‑up on homeowner underinsurance and algorithmic valuation concerns

At a June 18 informational session, board members heard testimony about homeowner underinsurance after California wildfires and the use of algorithmically‑driven replacement cost estimators by insurers and third parties.

Vice Chair Sally Lieber — who convened the public hearing in May and summarized its findings for the June meeting — said the board will work on policy options that include both modest administrative changes and potential statutory revisions. ‘‘The financial stakes for Californians could not be higher,’’ Lieber said, urging the board to pursue transparency and consumer safeguards.

Public commenters and an insurance‑industry participant called on the board to address flaws in replacement‑cost estimators that can leave homeowners underinsured. David Schafer, an independent insurance agent, submitted a 29‑page proposal to the board outlining ten reform items and asked to work with BOE staff on implementation. Schafer emphasized industry knowledge and urged collaborative solutions.

Lieber said she plans to return to the board with a set of recommended actions, potentially including proposals that would require insurers to provide clearer, standardized warnings about the impact of replacement‑cost options and to require better disclosure from providers of automated estimators. The board did not adopt any legislative language at the June 18 meeting; Vice Chair Lieber said she will bring specific options and possible legislation back for the board's consideration.

The item was framed as policy development work; staff and the board will determine next steps, which could include model legislative language, a proposed request to the Department of Insurance, or referral to counsel for legal drafting. No formal vote or directive beyond development of options was taken during the June 18 meeting.