This updates new legislation in California in anticipation of another season of devastating fires. California is in drought again. The summer has just begun and there has already been a record hardening. Although California has been spared so far, forest fires are expected to continue to erupt through California as it continues to heat up and dry out. The expected forest fires are expected to lead to an influx of non-state insurance adjusters to California to handle the volume of insurance claims. It is safe to assume that adjusters outside the state will not be quick with 2021 changes in California's insurance law. As a policyholder's advocate, you can add value to any claim by simply keeping up to date on the rapidly changing California Insurance Code and applying it to your claims representation.
This article highlights three important parts of consumer-friendly legislation that have been incorporated into the law. :
To give some background, about 15 years ago, California Insurance Commissioner Steve Poizner hosted a roundtable with many executives at "big box" insurance companies. The purpose was to establish uniform guidelines that could better streamline the process for handling damages. Since the round table, the California Department of Insurance has made it a practice to issue a notice reminding all insurers of these voluntary claims handling procedures after most major forest fires. . 1. Guaranteed 4 Months Advance Payment of ALE for Total Losses
California Insurance Code § 2061 (a) (1) is added to the insurance code to read:
If an insured has claimed additional living expenses related to a total loss, a insurance companies at the request of an insured pay an advance payment of at least four months' living expenses. Additional payment for additional living expenses must be paid after correct proof after the advance period.
This should be requested immediately from the carrier and the claim should, if possible, be an agreed fair rental value. Keep in mind that when fires occur, the cost of comparable landlords increases sharply due to demand.
2. No requirement for a company-specific content claim inventory form
California Insurance Code § 2061 (a) (2) is added to the insurance code, to read:
If an insured has claimed content related to a total loss of a primary residence , the insurer shall not require the insured to use a company-specific inventory form if the insured can provide an inventory using a form that contains essentially the same information. This division does not limit an insurer's power to seek additional reasonable information from an insured upon receipt of an inventory form submitted by an insured.
Carriers' personal inventory forms are often deliberately difficult to navigate. Unnecessary information is requested and labor-intensive information is requested. When adjusting a content claim, you should use your own forms. Just make sure it contains all the relevant information to identify the property as specifically as possible, the age and condition of the property and the cost of replacement.
3. Groupings of categories of personal property must be accepted
California Insurance Code § 2061 (a) (3) is added to the insurance code to read:
If an insured has claimed content related to a total loss the insurer must accept a inventory that includes groupings of categories of personal property, including clothing, shoes, books, groceries, CDs, DVDs, or other categories of items that would be impractical to list each individual separately
You no longer need to provide individual information about articles. For example, if there were several hardcover books required earlier, you will need to list each individual book by title. Now you can only create one line for "20 hardcover books." For clothes, you can submit the claim "ten men's dress shirts." Keep in mind that despite grouping items, your descriptions should be specific enough to provide value for each item in the grouping.
4. 60-Day Insurance Premium Grace Period
California Insurance Code § 2062 is added to the insurance code to read:
2062. In the event of an emergency, as defined in section 8558 of the Government Code, the insurer shall offer a 60-day period for the payment of premiums for home insurance covering a property located within the affected area defined in the state for a period of 60 days after the emergency. This section does not require any change to the insurer's billing methods regarding invoicing, automatic payment or cancellation for non-payment if the insurer restores any insurance covered by this section without insuring coverage or late fees, requested by the insured and after reasonable payment of all due premier.
While this may not help increase the amount of damages, it will be aware of this new statue and help insured with grace periods to develop strong customer relationships and show professionalism. with both the carrier and your customers.
In addition to codifying the previous voluntary procedures for handling claims, SB 872 also provided overlapping language with AB 3012. In particular, both bills prohibit the land value deduction and provide an additional two-week extension of ALE for good purposes following a civil authority order. These updates are discussed in more detail in 2021 California Legislative Update: Assembly Bill 3012 .
1 See “Expedited Claims Handling & Billing Grace Period Procedures for California Insurance Holders Due to Wildfire” (August 26, 2020). http://www.insurance.ca.gov/0250-insurers/0300-insurers/0200-bulletins/bulletin-notices-commiss-opinion/upload/Notice-ExpeditedClaims-BillingGracePeriod.pdf