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Committee advances bill to let manufactured-home owners buy replacement-cost coverage through FAIR plan
Summary
SB 525 would require the California FAIR Plan to offer manufactured and mobile homeowners the option to purchase replacement-cost coverage. Supporters called it an equity measure for roughly 500,000 owners; the FAIR Plan and industry raised operational and depopulation concerns and sought technical clarifications.
Senator Jones presented SB 525 to the Insurance Committee as a measure to give manufactured-home owners in California access to an option to buy replacement-cost coverage through the California FAIR Plan.
‘‘The measure simply offers equity to the over 500,000 Californians…who own a manufactured home, or also known as a mobile home,’’ Senator Jones said, adding that the bill ‘‘does not add anyone new to the FAIR Plan’’ but would require the FAIR Plan to offer an optional replacement-cost product on an actuarial basis.
Kent Misich, a manufactured-home owner, described repeated nonrenewals and his inability to obtain replacement-cost coverage in the admitted market, saying he ultimately had to take a FAIR Plan policy that did not offer replacement-cost coverage. ‘‘My understanding of the bill as written…would require the California Fair Plan to offer manufactured homeowners the option for me to purchase replacement cost coverage the same as traditional housing is offered,’’ Misich testified.
Supporters — including representatives of manufactured-home owners and community advocates — said the change would address an ‘‘inequitable’’ status quo in which mobile-home residents, many on fixed incomes, face limited options and different coverage than stick-built homeowners.
The FAIR Plan representative described the organization’s position as neutral and submitted a letter of concerns, saying the FAIR Plan plays a role as insurer of last resort and that adding replacement-cost options could affect depopulation efforts. ‘‘The FAIR Plan has no position on the bill…they are happy to provide answers if questions arise during discussion,’’ a FAIR Plan representative said.
Industry witnesses and some senators urged technical refinements. Senator Padilla and Senator Nilo asked whether the option would be discriminatory or require subsidization; supporters said the coverage would be actuarially priced and optional. Senator Becker raised concern about record retention and underwriting implications. Senator Jones said ADUs would not be affected.
The committee moved the bill forward after debate. The transcript records the motion to pass the measure; the FAIR Plan and the Department of Insurance indicated ongoing conversations to resolve technical concerns.
Votes at a glance: SB 525 — Motion to pass recorded and the bill remained on call during roll calls; committee vote was recorded in transcript and the author indicated continued stakeholder negotiations.
