Forest fires are raging in California again. Climate change in combination with a prolonged heat wave and a rare summer lighting storm has ignited several parts of the state. The fires affect many populated areas. Homes and businesses are destroyed. Unfortunately, this seems to be the new norm. Due to the increase in fire disasters, California has acted to change the law to increase property insurance coverage.
As a reminder, here are some of the new changes in recent years.
- The payment for a building that is a total loss is now its actual cash value. This changes the previously prescribed payment of a building's real market value, ie what someone would pay for the home or the building itself in its condition before the loss. Cal. Ins. Code § 2051
- In the event of a total loss of the insured structure, if the insured decides to buy a new property rather than rebuild, the insured is entitled to full compensation cost as long as the cost of the new home or building is within the policy's compensation cost limits. Cal. Ins. Code § 2051.5 (c).
- If an insured property is damaged due to a declared state of emergency, the insured has 24 times to bring an action. This extends the permitted minimum of 12 months. Cal. Ins. Code § 2071.
New policyholder-friendly legislation is on the way. We previously provided a summary in a blog post earlier this year. The post contains links where you can check the status of the proposed changes:
California Legislature introduces even more policyholder-friendly legislation and regulations
See also Dan Veroff's latest blog on steps to take if you or the client fell victim to the latest wildfire:  Tips for Adjusting Wildfire Claims for Public Adjusters