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Lawmakers press insurers on delayed disaster payments; bill would impose interest on late payments
Summary
SB 8 78 would impose automatic interest penalties when insurers miss statutory deadlines for claim decisions and payments, require identification of disputed items within the 40‑day window, and require payment of undisputed amounts. Survivors described months‑long delays and rotating adjusters; insurers supported reform but argued automatic penalties and 30‑day ACV deadlines need exceptions for safety, access and fraud prevention.
Sen. Perez described SB 8 78 as a response to widespread delays and partial payments that have left wildfire and flood survivors unable to rebuild. The bill would impose a ten percent interest penalty (as amended in committee) on delayed payments when statutory deadlines are missed without justifiable cause, require insurers to identify disputed items in writing within the 40‑day window, and require payment of undisputed items while other parts of a claim remain under investigation.
Fire survivors testified that rotating adjusters, unclear or verbal denials and repeated reductions of original estimates have prolonged recovery. Damon Blunt and other witnesses described months or more than a year of administrative delay for payments that survivors view as clearly owed.
Industry groups said they share the goal of timely payments and noted insurers have paid billions in wildfire claims, but cautioned that some provisions — such as a mandatory actual cash value payment within 30 days for all losses — could lead to rushed, inaccurate payments, inflate contractor estimates and create public‑safety access issues when properties are inaccessible. Trade groups asked for narrowly tailored exceptions and additional technical fixes, which the author agreed to consider in further drafting.
The committee approved SB 8 78 as amended and sent it to Appropriations; supporters said the bill will reduce the incentive to stall claims, while opponents continued to press for guardrails and exceptions to avoid unintended consequences.
