.jpg)
The California State Senate passed a bill on Tuesday that strengthens support for residential property policyholders in case their homes are destroyed by disasters.
SB 894 requires insurers to offer to renew policies for at least the next two annual renewal periods, or 24 months (whichever is greater). Current laws only provide for the renewal of policies once.
For a policy that imposes a dollar limit on the amount of coverage provided for additional living expenses, the legislation also instructs insurers to grant an extension of that coverage for up to 12 additional months (for a total of 36 months) if the policyholder acted in good faith but suffered delays beyond their control.
If a policyholder suffers a loss relating to a declared state of emergency, insurers will have to combine the policy limits for primary dwelling and other structures, and contents, and use the combined amount as specified.
The bill, authored by Sen. Bill Dodd, D-Napa, passed with a vote of 24-11 in favor, and now heads to the state Assembly.
According to the Press Democrat, Dodd had to make some concessions to address industry opposition. He narrowed his measure so that insurance payments would apply to actual losses accrued, not the maximum amount listed under each line item of a policy.
The bill would extend policy renewal protections for survivors retroactively to July 01, 2017. This means survivors of the string of wildfires that hit California last year stand to benefit.
“Residents who have lost everything are struggling to recover and rebuild their homes and lives. This bill will provide much-needed protections and improve chances for recovery,” California Insurance Commissioner Dave Jones said.
