California's residents were not saved from disaster in 2018. Instead, the devastating wildernesses, including the largest and most devastating wildernesses, continued to linger California. The continuing disasters were more common and began much earlier in California's prolonged dry season. The number and size of the wilderness together with the insurance bearers' claims management has brought insurance issues to the legislator and the governor's attention. This has resulted in new laws that benefit policyholders. Some of the important laws presented in California in 2018 are summarized below.
The Insurance Code in California § 530.5 requires that if loss or damage is caused by a combination of hazards, one of which is a landslide, coverage must be made when an insured risk is the effective closest cause of the loss or damage. Although the effective nearby cause may be confusing, it is generally considered the predominant cause of the loss when there is more than one independent contributing cause to loss. The effective nearby cause need not be the initial cause or the immediate cause. Instead, the effective nearby cause is considered the most important cause of a loss. 1 According to the new language of the insurance code, an insurer will be excluded from relying on police language that excludes losses "contributed to or aggravated by" A landslide when a landslide was triggered by wild or rainstorms which have existed by courts for to be the effective closest cause of a landslide. 2
California Insurance Code § 2051.5 extends new benefits for policyholders when they decide to buy a new home instead of rebuilding after a total fire loss. First, the law clarifies that a policyholder who chooses to move to another place to rebuild or replace, has the right to receive the benefits of:
- Extended replacement cost and
- Building upgrade coverage
Thus, a homeowner can still get code upgrade if such code upgrades were required if the insured chose to build up the destroyed home. The new law also extends from 24 months to 36 months, the time when an policyholder is entitled to collect full compensation benefits under a replacement cost fire insurance. Language with this new requirement must be included in all insurance policies issued after July 1, 2019.
The California Code of Conduct § 2071 was amended to extend the existing statute of limitations for a homeowner to sue his insurer from twelve to 24 months when a loss is related to a declared emergency. In 2018, there were twelve separate federal emergencies in California. All declarations originated from the devastating series of wild fires.
The insurance code in California § 10103.4 requires that an insurance company at that time provide an offer to renew a policy for home insurance transferred to the policyholder and, on a biennial, an estimate of the cost necessary to rebuild or replace the insured building that complies with existing regulations. This Act enters into force no later than July 1, 2019.
The Insurance Code in California § 671 was amended to prohibit the insurer from interrupting or refusing to renew a homeowner's insurance for one year from the date of declaration of an emergency. This law also requires an insurer to renew a home insurance for at least two annual renewal periods or 24 months.
California Insurance Code § 10095.7 will require, in July 2020, the California Department of Insurance to establish a home insurance finder on
1 Garvey v. State Farm Fire & Cas. This site helps homeowners find insurance companies that offer housing policy in their area. Co (1989) 48 Cal.3d 395, 412.
2 Howell v. State Farm Fire & Cas. Co (1990) 218 Cal.App.3d 1446, 1452.