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Assembly committee advances paired bills to force insurer transparency and penalize delayed payouts after wildfires
Summary
The Assembly Insurance Committee advanced SB877 and SB878 after wildfire survivors and consumer groups described widespread ‘loss estimate alteration’ and payment delays. SB877 would require insurers to disclose original and revised loss estimates; SB878 would impose financial penalties for unjustified claim delays.
The Assembly Insurance Committee voted to advance two related bills aimed at improving post‑disaster insurance practices after witnesses described months‑long delays, underpayments and altered loss estimates in the wake of recent California wildfires.
Sen. Sasha Perez, the bill’s author, told the committee SB877 would require insurers to provide policyholders, on request, the original loss estimates and any subsequent revisions along with explanations for changes. ‘‘Survivors were forced to navigate complex insurance processes…for many survivors, that uncertainty did not end there,’’ Perez said during her presentation.
Why it matters: Witnesses said lack of access to earlier estimates prevents homeowners from understanding how payouts were calculated and from appealing reductions. Sam Sturgasich, an Eaton Fire survivor who identified himself to the committee, said he received an original adjuster estimate that later arrived at him in a lowered, redlined form. ‘‘The difference these red marks reflect is hundreds of thousands of dollars,’’ Sturgasich said. He asked members to back SB877 so homeowners can see the original calculations.
SB878, presented by the same author, would strengthen California’s prompt‑payment protections by imposing automatic interest penalties — the measure text in committee cites a 10% interest penalty when insurers miss statutory deadlines without justifiable cause — and by requiring insurers to identify denied or disputed items in writing within the 40‑day decision window and to pay undisputed amounts on time.
Supporters and findings: Joy Chen of the Every Fire Survivors Network described a pattern of ‘‘delays, denials and underpayments’’ and said whistleblower accounts indicate managers who never visited damaged properties often reduce adjuster estimates. Multiple coalition groups, including AARP California, the Consumer Federation of California and the California Nurses Association, registered in strong support. The California Department of Insurance, represented by Miguel Bustillos on behalf of Commissioner Ricardo Lara, listed the department as a co‑sponsor of SB878.
Industry response: Industry representatives said they appreciate the conversation and, after amendments, many moved to neutral. Paul Ramey of the Personal Insurance Federation told the committee his group moved to a neutral position following recent amendments. The American Property Casualty Insurance Association disputed characterizations of a systemic problem and noted insurers have paid large sums for recent fires, while still saying a better, more uniform experience for policyholders is desirable.
Committee action and next steps: The committee recorded motions to pass the bills to the appropriations committee; clerk roll calls were called on the record with a majority of members present voting to advance the measures. Sponsors said they will call votes when quorum and procedural timing allow, and survivors asked members to ensure the bills remain focused on transparency and enforceability.
The committee’s action sends SB877 and SB878 to the next phase of review; both measures may be amended again as they move through the legislative process.
