A new proposed bill in California would make it harder for insurance companies to drop policyholders over fire risk.
State senators from Northern and Southern California are proposing the bill, which comes roughly a year after Los Angeles County was hit by the costliest wildfire in terms of insurance in state history.
“The bill basically says if you’re trying to non-renew somebody, you’ve got to give them six months notice and you’ve got to give them some indication as to why they’re being dropped,” State Sen. Ben Allen said.
If a policyholder is being dropped due to a lack of defensible space for example, companies would have to give the homeowner a chance to fix the situation.
“The very least, the homeowner can know what’s going on,” Allen said. “If it’s something they can personally control, fantastic. They can hopefully get that remedied.”
In recent years, fire insurance has become a hurdle for many would-be homeowners as insurance companies become less likely to insure homes in so-called fire danger areas.
Advocacy group Consumer Watchdog, which worked with state senators on the bill, said it would also improve communication between insurance companies and homeowners.
“This legislation simply requires insurance companies to provide greater disclosure to consumers about the reasons for non-renewal and give them a chance to fix it so they can keep their coverage,” Consumer Watchdog Executive Director Carmen Balber said.