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Assembly committee approves AB 597 to cap public adjuster fees and ban disaster solicitation
Summary
The Assembly Committee on Insurance voted unanimously to pass AB 597, a bill by Assemblyman Simba Harabedian that would cap public adjuster fees at 15% for claims tied to declared disasters, tighten contract disclosures and prohibit solicitations while emergency conditions exist. The bill was referred to the Appropriations Committee.
The Assembly Committee on Insurance voted 16-0 to pass AB 597, a bill by Assemblyman Simba Harabedian that would cap public adjuster fees at 15% of an insurance payout for claims tied to declared disasters, require clearer contract disclosures and ban solicitation of disaster survivors while emergency conditions exist. The committee referred the measure to the Assembly Appropriations Committee.
AB 597’s author told the committee the bill is intended to protect homeowners after wildfires, floods and earthquakes from allegedly predatory practices by some public adjusters. “When disaster strikes ... homeowners turn to their insurance policies to begin the process of rebuilding their lives,” Harabedian said. He described excessive fees, vague contract terms and aggressive solicitation as problems the bill addresses, and said he would accept committee amendments and is requesting an urgency clause.
Josephine Figueroa, Deputy Commissioner and Legislative Director at the California Department of Insurance, testified as a sponsor, saying the department has received complaints about adjusters charging “upwards of 30%” and soliciting in prohibited periods. Figueroa told the committee AB 597 would “prevent the revictimization and targeting of disaster survivors when they are at their most vulnerable” by narrowing fee allowances to 15% in declared disasters, barring consideration of payments made to consumers before a contract and giving consumers a right to rescind contracts solicited during prohibited periods.
Supporters who spoke included representatives of the American Property Casualty Insurance Association, the Personal Insurance Federation of California and the Pacific Association of Domestic Insurance Companies. Opponents included trade groups for public adjusters; Ron Reitz of the Pacific Coast Association of Public Insurance Adjusters said his organization “oppose[s] it as written” but was willing to work with the author and committee. Matthew Blumkin, president of the National Association of Public Adjusters, also opposed the bill as drafted but offered to negotiate language.
The committee’s motion to pass AB 597 and refer it to appropriations carried on a roll call of 16-0. The vote sheet was left open for additional members to add on before final transmission to Appropriations. The measure will next be scheduled for consideration by the Assembly Appropriations Committee.
Votes at a glance
AB 597 — Motion: Do pass and re-refer to Committee on Appropriations; Outcome: Passed and referred; Roll call: 16-0 (members recorded as voting aye included Calderon, Wallace, Chen, Gallagher, Gibson, Harabedian, Krell, Nguyen, Rodriguez, Valencia, Addis, Avila Farias, Ortega, Berman, Hadwick, Alvarez).
Why it matters: Supporters say AB 597 shields disaster survivors from high fees, misleading contract terms and improper solicitation during ongoing emergency conditions; opponents say the language, as drafted, could unduly limit how public adjusters are paid and want revisions. The Appropriations Committee will review fiscal and implementation impacts before the bill moves to the Assembly floor.
