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Bill to require clearer nonrenewal notices and mitigation windows wins committee support after survivor testimony
Summary
SB 13 01 would force insurers to spell out why a homeowner’s policy won’t be renewed, publish underwriting guidelines and give homeowners a reasonable, documented opportunity to mitigate defects so coverage can be continued. Fire survivors testified about opaque notices and costly fixes; insurers pressed for narrower timelines and rules about inspections and reporting.
Sen. Allen introduced SB 13 01 to require insurers to provide specific, written justification when they decline to renew a homeowners policy, to disclose the underwriting standards that make a property ineligible and to offer homeowners a reasonable, documented opportunity to mitigate conditions that put a property outside underwriting guidelines.
Author and supporters said the current nonrenewal process is opaque and often leaves homeowners without a way to correct problems. Magda Molina, an Altadena homeowner who lost coverage after following insurer instructions and spending $8,000 on roof work, told the committee that her insurer later demanded a full roof replacement costing over $30,000 and still nonrenewed her policy. ‘‘We did everything we were told…and still lost our coverage,’’ she said.
Consumer groups including Consumer Watchdog supported the bill, saying unclear nonrenewal letters and unpublished underwriting rules prevent homeowners from addressing correctable problems and lead to unnecessary loss of coverage. Carmen Balber of Consumer Watchdog said California ranks fourth nationally for nonrenewals and urged the committee to give families a chance to keep insurance.
Insurer representatives including the Personal Insurance Federation and the American Property Casualty Insurance Association told the committee they support increased transparency in principle but raised technical objections. They warned that the 180‑day notice period originally proposed would be the nation’s longest and could create unpredictability for the market; they also urged protections against duplicate penalties, clarity about what constitutes ‘‘useful life’’ for roof inspections, and that some underwriting reasons are portfolio or market driven rather than property specific.
Sen. Allen and the author’s office said they were negotiating amendments in the hearing to narrow timelines and ensure the provision applies per exam or per nonrenewal decision (not per policy year), and to avoid stacking penalties. Several committee members pressed the author to put agreed changes in writing before a floor vote; Sen. Rubio said he wants any agreed fix written for the record.
The committee moved SB 13 01 to the Appropriations Committee as amended. Next steps will include drafting the technical amendments discussed in the hearing and continuing stakeholder negotiations on inspection standards, the notice period, and data or reporting requirements.
