Since the January 2025 firestorms damaged or destroyed more than 12,000 homes in Los Angeles County, fire victims have repeatedly complained that insurers have delayed, denied or underpaid many of their claims, with most still displaced.<\/p>\n
A year later, state lawmakers have introduced legislation to address those problems.<\/p>\n
One bill, authored by newly appointed Senate Insurance Committee Chairperson Steve Padilla<\/a>, (D-San Diego), and backed by Insurance Commissioner Ricardo Lara, addresses more than a half-dozen problems that have cropped over the past year. <\/p>\n Senate Bill 876<\/a> would double penalties during a declared emergency for violations of laws regulating claims practices, and would require insurers to pay restitution directly to policyholders.<\/p>\n It also would double the amount of money insurers would have to pay for living expenses during a disaster while the homes of fire victims are being rebuilt or cleaned up. And it would speed up-front payments to policyholders whose homes have burned down. <\/p>\n The law requires insurers to develop a \u201cdisaster recovery plan\u201d for handling mass claims in a timely manner. The plan would have to be reviewed by the Department of Insurance.<\/p>\n \u201cThe last 12 months have made clear the urgent need to update and modernize the claim process to better protect homeowners devastated by these wildfires,\u201d said Padilla, in a statement.<\/p>\n Lara has faced criticism<\/a> from fire victims for not standing up to insurers \u2014 a claim he denies. He said in his own statement that, \u201cWe will measure success when people can recover without red tape and delays, get coverage on their own terms, and rebuild so they are out of harm\u2019s way in the future.\u201d<\/p>\n Denni Ritter, a vice president of the American Property Casualty Insurance Assn., a leading industry trade group in California, said, \u201cWe are closely reviewing the legislation. Insurers are deeply committed to paying claims fairly, promptly, and transparently.\u201d<\/p>\n Two other bills were authored by Sen. Sasha Ren\u00e9e P\u00e9rez<\/a> (D-Alhambra), whose district includes the Eaton fire zone. They were backed by Los Angeles advocacy group Consumer Watchdog<\/a> and the Eaton Fire Survivors Network<\/a>, which have called for Lara\u2019s resignation. <\/p>\n The legislation focuses on two of the biggest complaints registered by fire victims: delays in getting claims payments and reductions in settlement offers following higher initial damage estimates by field adjusters.<\/p>\n Senate Bill 877<\/a> would require insurers to fully disclose all loss estimate documents and revisions to policyholders with explanations, while identifying those who made the changes.<\/p>\n \u201cI was hearing directly from fire survivors that with the loss estimates they were really getting the run around from adjusters and felt like they were being low balled in many cases when they were finally getting their payout,\u201d P\u00e9rez said.<\/p>\n Senate Bill 878 <\/a>would impose automatic 20% interest penalties when insurers delay making payments required by law, including a 30-day deadline to pay undisputed parts of a claim. (Lara\u2019s and Padilla\u2019s bill also includes interest penalties when certain payments aren\u2019t made on time.)<\/p>\n \u201cWhat we\u2019ve heard from our constituents is that oftentimes, rather than denying the claim, what they\u2019ll do is they\u2019ll just delay and delay and kind of wait out fire survivors who they know are desperate,\u201d she said.<\/p>\n P\u00e9rez said she expected the bills to be a \u201clift\u201d to get enacted but noted that Florida, a more conservative state, has passed similar legislation.<\/p>\n Last year, a host of bills were introduced following the fires, only some of which were enacted due to opposition. Those included a bill making it easier to file claims for personal property losses and a bill requiring mortgage servicers to give victims of fire disasters up to 12 months of mortgage relief, though it included exceptions that have frustrated fire victims<\/a>.<\/p>\n Among the legislation that did not advance were bills promoting insurance discounts for homeowners who reduce wildfire risk on their property.<\/p>\n