The California Senate approved Senate Bill 495, which introduces new requirements for property insurers and has drawn opposition from industry groups.
The bill mandates that carriers provide full personal property coverage up to the policy limit without requiring an itemized inventory in cases of total loss following a declared emergency.
Current law permits a minimum advance payment of 30% of the policy limit in such cases without an itemized claim.
Insurance Commissioner Ricardo Lara previously called on carriers to offer full content coverage without requiring itemized lists, following consumer feedback about the difficulty of listing all lost items to claim replacement costs.
SB 495 also prohibits insurers from demanding proof of loss less than 180 days after a loss resulting from a declared state of emergency.
Industry representatives argue the bill would lead to overpayments in claims, since it disconnects coverage amounts from actual documented losses.
According to Mark Sektnan, vice president of state government relations at the American Property Casualty Insurance Association, this could trigger premium increases as carriers adjust for inflated payouts.
He also noted the bill could violate insurance law by creating disparities in payments between policyholders with similar coverage but different carrier practices in determining content payouts.
The trades are opposed to SB 495 because it will make insurance significantly more expensive for millions of Californians at a time families are already struggling with the high cost of living and it would result in serious inequities between similarly situated consumers
Mark Sektnan, vice president of state government relations at the American Property Casualty Insurance Association
Sektnan emphasized that under existing law, similarly situated policyholders are treated equally in content payouts when inventories are waived. SB 495, he argued, would disrupt that balance, allowing varying payment outcomes depending on the insurer.
In addition to content coverage provisions, SB 495 introduces a new reporting obligation.
Insurers admitted in California with more than $50 mn in written premiums across fire, allied lines, private flood, homeowners, farmowners, and commercial nonliability lines must file annual disclosures.
These reports must detail their reinsurance placements and use of probabilistic catastrophe models from the prior year, as noted in the Senate Judiciary Committee analysis.
