Insurance reform bill aims to help victims hit hard by devastating wildfires

California Connection

CITRUS HEIGHTS, Calif. (KTXL) — The latest loss of homes and structures due to wildfires underscores the importance of fire insurance but also of how policies are handled by insurance companies.

That prompted the passage of a wildfire insurance reform bill authored by Democratic Sen. Bill Dodd, who represents Napa and Solano counties.

Northern California has been at the epicenter of devastating wildfires over the years. In the last four years, tens of thousands of structures have been destroyed.

Fire victims are often bogged down with red tape.

“2017 fires, 2019 fires, and now, of course, 2020 all too familiar issues,” Sen. Dodd said.

Dodd has heard earfuls from fire victims in his district and worked with Insurance Commissioner Ricardo Lara to craft an insurance reform measure.

Some common complaints that his insurance bill rectifies include policies being canceled for late payments.

“You don’t even have a mailbox,” Dodd said. “You can’t cancel your insurance because you haven’t paid your bill a couple of months after your house burned down.”

Another concern is insurance companies pay out policies one month at a time, often not enough given the immediate need for housing, transportation and furnishings.

“Because there are so many expenses, just pay four months upfront, they are going to get the money anyway. It may be a cash flow deal but I’m not worried about insurance companies’ cash flow,” Dodd said.

And then there’s the practice by insurance companies to deduct the value of the land when paying off for a home that’s been destroyed.

“They’ve been deducting the land value from the cost,” Dodd said. “Once the governor signs the bill, they won’t be doing that anymore.”

The bill also extends payments for items lost without having to come up with an inventory list.

With 1,600 structures lost so far in the recent fires and with 650 fires still burning in the state, the bill was passed with bipartisan support.

The bill, if signed by Gov. Gavin Newsom, takes effect on January 1.

Given current climate trends and the history of devastating history of recent wildfires in California, Dodd said he believes the new insurance reforms will benefit many homeowners here in the state for years to come.

Sen. Dodd said Newsom is on board with the reforms and he expects the governor to sign the legislation when it gets to his desk.

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