AB 2229: Residential property insurance: disclosures.
- Session Year: 2017-2018
- House: Assembly
- Latest Version Date: 2018-07-09
Existing law requires a named insured on a residential property insurance policy be provided with a copy of the California Residential Property Insurance Disclosure, which sets forth a description of certain types of insurance coverage, such as actual cash value coverage and guaranteed replacement cost coverage. Existing law also requires every California Residential Property Insurance Disclosure be accompanied by a California Residential Property Insurance Bill of Rights.
This bill would require a California Residential Property Insurance Disclosure that is provided on and after January 1, 2020, to include any fire safety-related discounts offered by the insurer.
Existing law requires a named insured on a residential property insurance policy be provided with a copy of the California Residential Property Insurance Disclosure, which sets forth a description of certain types of insurance coverage, such as actual cash value coverage and guaranteed replacement cost coverage. Existing law also requires every California Residential Property Insurance Disclosure be accompanied by a California Residential Property Insurance Bill of Rights.
This bill would require a California Residential Property Insurance Disclosure that is provided on and after January 1, 2020, to include any fire safety-related discounts offered by the insurer.
Existing law requires a named insured on a residential property insurance policy be provided with a copy of the California Residential Property Insurance Disclosure, which sets forth a description of certain types of insurance coverage, such as actual cash value coverage and guaranteed replacement cost coverage. Existing law also requires every California Residential Property Insurance Disclosure be accompanied by a California Residential Property Insurance Bill of Rights.
This bill would require a California Residential Property Insurance Disclosure that is provided on and after January 1, 2020, to include any fire safety-related discounts offered by the insurer.
(1)Existing law requires certain fire policies on subject matter in California to be executed using the standard form of fire insurance policy that contains required and optional provisions. Under existing law, it is a misdemeanor to issue a fire policy that varies from the standard form.This bill would require the standard form of fire insurance policy to include the features of the property being insured that contribute to increased or decreased risk as compared to similar properties in the region, and would further require, to the extent possible, the policy to inform the insured how these risk factors are affecting the costs of the insureds insurance policy. By expanding the scope of an existing crime, the bill would impose a state-mandated local program.(2)The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.This bill would provide that no reimbursement is required by this act for a specified reason.(1)Existing law requires certain fire policies on subject matter in California to be executed using the standard form of fire insurance policy that contains required and optional provisions. Under existing law, it is a misdemeanor to issue a fire policy that varies from the standard form.
This bill would require the standard form of fire insurance policy to include the features of the property being insured that contribute to increased or decreased risk as compared to similar properties in the region, and would further require, to the extent possible, the policy to inform the insured how these risk factors are affecting the costs of the insureds insurance policy. By expanding the scope of an existing crime, the bill would impose a state-mandated local program.
(2)The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
(a)The disclosure required by Section 10101 shall be in no less than 10-point typeface and shall be provided prior to or concurrent with, the application for a policy of residential property insurance. In the event that an application is made by telephone, an insurer that mails a copy of the disclosure within three business days shall be in compliance with this section. For policies issued on or after July 1, 1993, the agent or insurer shall obtain the applicants signature acknowledging receipt of the disclosure form within 60 days of the date of the application. When the insurer or agent establishes delivery of the disclosure form by obtaining the signature of the applicant or insured, or when an insurer or agent provides the applicant with the disclosure form and the applicant does not return a signed acknowledgment of receipt within 60 days of the date it was provided, there shall be a conclusive presumption that the insurer or agent has complied with the disclosure requirement of this chapter. The insurer or agent shall have the burden of demonstrating in accordance with California Rules of Evidence that the disclosure was provided to the applicant or insured. A signature shall not be required at the time of renewal.
If the disclosure is mailed to the named insured or applicant, it shall be mailed to the mailing address shown on the policy of residential property insurance or to the address requested by the applicant. First-class mail shall be deemed adequate for proof of mailing. The insurer shall have the burden of demonstrating in accordance with California Rules of Evidence that the disclosure was mailed to the applicant or insured.
The disclosure shall contain the following language:
(b)The agent or insurer shall indicate on the disclosure form which coverages the applicant or insured has selected or purchased.
(c)The disclosure statement may contain additional provisions not conflicting with, annulling, or detracting from the foregoing.
(d)Following the issuance of the policy of residential property insurance, the insurer shall provide the disclosure statement to the insured on an every-other-year basis at the time of renewal. The disclosure required by this section may be transmitted with the material required by Section 10086.1.
(e)No policy of residential property insurance may be initially issued on and after January 1, 1993, as guaranteed replacement cost coverage if it contains any maximum limitation of coverage based on any set dollar limits, percentage amounts, construction cost limits, indexing, or any other preset maximum limitation for covered damage to the insured dwelling. The limitations referred to in this section are solely applicable to dwelling structure coverages. Endorsements covering additional risks to the insurers dwelling structure coverage may have internal limits as long as those endorsements are not called guaranteed replacement cost coverage.
(f)On and after July 1, 1993, no policy of residential property insurance may be renewed as guaranteed replacement cost coverage if it contains any maximum limitation of coverage based on any set dollar limits, percentage amounts, construction cost limits, indexing, or any other preset maximum limitation for covered damage to the insured dwelling. The limitations referred to in this section are solely applicable to dwelling structure coverages. Endorsements covering additional risks to the insurers dwelling structure coverage may have internal limits as long as those endorsements are not called guaranteed replacement cost coverage.
(g)Coverage provided for building code upgrades by a policy of residential property insurance shall be applicable to building codes, ordinances, standards, or laws only to the extent that those codes, ordinances, standards, or laws do not impose stricter standards on the property on the basis of the level of insurance coverage applicable to the property.
(h)The disclosure required by Section 10101 shall also be provided to the mortgagor in the event that a policy is forced placed by an insurer at the request of a mortgagee. In those cases, neither the insurer nor the mortgagee shall be required to obtain a signature from the mortgagor. No disclosure shall be required to be provided with respect to blanket policies issued to a mortgagee, and designed to provide interim coverage for losses occurring prior to the mortgagee obtaining knowledge of the lapse of the policy and prior to placement of a policy on behalf of the mortgagor.
(i)A disclosure required by Section 10101 that is provided on and after January 1, 2020, shall include any fire safety-related discounts offered by the insurer.
(a)The disclosure required by Section 10101 shall be in no less than 10-point typeface and shall be provided prior to or concurrent with, the application for a policy of residential property insurance. In the event that an application is made by telephone, an insurer that mails a copy of the disclosure within three business days shall be in compliance with this section. For policies issued on or after July 1, 1993, the agent or insurer shall obtain the applicants signature acknowledging receipt of the disclosure form within 60 days of the date of the application. When the insurer or agent establishes delivery of the disclosure form by obtaining the signature of the applicant or insured, or when an insurer or agent provides the applicant with the disclosure form and the applicant does not return a signed acknowledgment of receipt within 60 days of the date it was provided, there shall be a conclusive presumption that the insurer or agent has complied with the disclosure requirement of this chapter. The insurer or agent shall have the burden of demonstrating in accordance with California Rules of Evidence that the disclosure was provided to the applicant or insured. A signature shall not be required at the time of renewal.
If the disclosure is mailed to the named insured or applicant, it shall be mailed to the mailing address shown on the policy of residential property insurance or to the address requested by the applicant. First-class mail shall be deemed adequate for proof of mailing. The insurer shall have the burden of demonstrating in accordance with California Rules of Evidence that the disclosure was mailed to the applicant or insured.
The disclosure shall contain the following language:
(b)The agent or insurer shall indicate on the disclosure form which coverages the applicant or insured has selected or purchased.
(c)The disclosure statement may contain additional provisions not conflicting with, annulling, or detracting from the foregoing.
(d)Following the issuance of the policy of residential property insurance, the insurer shall provide the disclosure statement to the insured on an every-other-year basis at the time of renewal. The disclosure required by this section may be transmitted with the material required by Section 10086.1.
(e)No policy of residential property insurance may be initially issued on and after January 1, 1993, as guaranteed replacement cost coverage if it contains any maximum limitation of coverage based on any set dollar limits, percentage amounts, construction cost limits, indexing, or any other preset maximum limitation for covered damage to the insured dwelling. The limitations referred to in this section are solely applicable to dwelling structure coverages. Endorsements covering additional risks to the insurers dwelling structure coverage may have internal limits as long as those endorsements are not called guaranteed replacement cost coverage.
(f)On and after July 1, 1993, no policy of residential property insurance may be renewed as guaranteed replacement cost coverage if it contains any maximum limitation of coverage based on any set dollar limits, percentage amounts, construction cost limits, indexing, or any other preset maximum limitation for covered damage to the insured dwelling. The limitations referred to in this section are solely applicable to dwelling structure coverages. Endorsements covering additional risks to the insurers dwelling structure coverage may have internal limits as long as those endorsements are not called guaranteed replacement cost coverage.
(g)Coverage provided for building code upgrades by a policy of residential property insurance shall be applicable to building codes, ordinances, standards, or laws only to the extent that those codes, ordinances, standards, or laws do not impose stricter standards on the property on the basis of the level of insurance coverage applicable to the property.
(h)The disclosure required by Section 10101 shall also be provided to the mortgagor in the event that a policy is forced placed by an insurer at the request of a mortgagee. In those cases, neither the insurer nor the mortgagee shall be required to obtain a signature from the mortgagor. No disclosure shall be required to be provided with respect to blanket policies issued to a mortgagee, and designed to provide interim coverage for losses occurring prior to the mortgagee obtaining knowledge of the lapse of the policy and prior to placement of a policy on behalf of the mortgagor.
(i)A disclosure required by Section 10101 that is provided on and after January 1, 2020, shall include any fire safety-related discounts offered by the insurer.
(a)The disclosure required by Section 10101 shall be in no less than 10-point typeface and shall be provided prior to or concurrent with, the application for a policy of residential property insurance. In the event that an application is made by telephone, an insurer that mails a copy of the disclosure within three business days shall be in compliance with this section. For policies issued on or after July 1, 1993, the agent or insurer shall obtain the applicants signature acknowledging receipt of the disclosure form within 60 days of the date of the application. When the insurer or agent establishes delivery of the disclosure form by obtaining the signature of the applicant or insured, or when an insurer or agent provides the applicant with the disclosure form and the applicant does not return a signed acknowledgment of receipt within 60 days of the date it was provided, there shall be a conclusive presumption that the insurer or agent has complied with the disclosure requirement of this chapter. The insurer or agent shall have the burden of demonstrating in accordance with California Rules of Evidence that the disclosure was provided to the applicant or insured. A signature shall not be required at the time of renewal.
If the disclosure is mailed to the named insured or applicant, it shall be mailed to the mailing address shown on the policy of residential property insurance or to the address requested by the applicant. First-class mail shall be deemed adequate for proof of mailing. The insurer shall have the burden of demonstrating in accordance with California Rules of Evidence that the disclosure was mailed to the applicant or insured.
The disclosure shall contain the following language:
(b)The agent or insurer shall indicate on the disclosure form which coverages the applicant or insured has selected or purchased.
(c)The disclosure statement may contain additional provisions not conflicting with, annulling, or detracting from the foregoing.
(d)Following the issuance of the policy of residential property insurance, the insurer shall provide the disclosure statement to the insured on an every-other-year basis at the time of renewal. The disclosure required by this section may be transmitted with the material required by Section 10086.1.
(e)No policy of residential property insurance may be initially issued on and after January 1, 1993, as guaranteed replacement cost coverage if it contains any maximum limitation of coverage based on any set dollar limits, percentage amounts, construction cost limits, indexing, or any other preset maximum limitation for covered damage to the insured dwelling. The limitations referred to in this section are solely applicable to dwelling structure coverages. Endorsements covering additional risks to the insurers dwelling structure coverage may have internal limits as long as those endorsements are not called guaranteed replacement cost coverage.
(f)On and after July 1, 1993, no policy of residential property insurance may be renewed as guaranteed replacement cost coverage if it contains any maximum limitation of coverage based on any set dollar limits, percentage amounts, construction cost limits, indexing, or any other preset maximum limitation for covered damage to the insured dwelling. The limitations referred to in this section are solely applicable to dwelling structure coverages. Endorsements covering additional risks to the insurers dwelling structure coverage may have internal limits as long as those endorsements are not called guaranteed replacement cost coverage.
(g)Coverage provided for building code upgrades by a policy of residential property insurance shall be applicable to building codes, ordinances, standards, or laws only to the extent that those codes, ordinances, standards, or laws do not impose stricter standards on the property on the basis of the level of insurance coverage applicable to the property.
(h)The disclosure required by Section 10101 shall also be provided to the mortgagor in the event that a policy is forced placed by an insurer at the request of a mortgagee. In those cases, neither the insurer nor the mortgagee shall be required to obtain a signature from the mortgagor. No disclosure shall be required to be provided with respect to blanket policies issued to a mortgagee, and designed to provide interim coverage for losses occurring prior to the mortgagee obtaining knowledge of the lapse of the policy and prior to placement of a policy on behalf of the mortgagor.
(i)This section shall become operative on July 1, 2011.(i)A disclosure required by Section 10101 that is provided on and after January 1, 2020, shall include any fire safety-related discounts offered by the insurer.
SECTION 1.Section 2073 of the Insurance Code is amended to read:2073.(a)The policy shall be plainly printed. The type shall not be smaller than eight-point and in a style not less legible than Century and subheads shall be in type larger than eight-point and in a style not less legible than Century. The lines of the policy following the countersignature clause shall be numbered consecutively.(b)The policy shall include the features of the property that contribute to increased or decreased risk as compared to similar properties in the region. The policy, to the extent possible, shall inform the insured how these risk factors are affecting the costs of the insureds insurance policy.SEC. 2.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.(a)The policy shall be plainly printed. The type shall not be smaller than eight-point and in a style not less legible than Century and subheads shall be in type larger than eight-point and in a style not less legible than Century. The lines of the policy following the countersignature clause shall be numbered consecutively.
(b)The policy shall include the features of the property that contribute to increased or decreased risk as compared to similar properties in the region. The policy, to the extent possible, shall inform the insured how these risk factors are affecting the costs of the insureds insurance policy.
SEC. 2.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
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Date
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Status
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| Jul 9, 2018 | Chaptered by Secretary of State - Chapter 75, Statutes of 2018. |
| Jul 9, 2018 | Approved by the Governor. |
| Jun 29, 2018 | Enrolled and presented to the Governor at 3 p.m. |
| Jun 25, 2018 | In Assembly. Ordered to Engrossing and Enrolling. |
| Jun 25, 2018 | Read third time. Passed. Ordered to the Assembly. |
| Jun 14, 2018 | Read second time. Ordered to Consent Calendar. |
| Jun 13, 2018 | From committee: Do pass. To Consent Calendar. (Ayes 11. Noes 0.) (June 13). |
| May 10, 2018 | Referred to Com. on INS. |
| Apr 26, 2018 | In Senate. Read first time. To Com. on RLS. for assignment. |
| Apr 26, 2018 | Read third time. Passed. Ordered to the Senate. |
| Apr 19, 2018 | Read second time. Ordered to Consent Calendar. |
| Apr 18, 2018 | From committee: Do pass. To Consent Calendar. (Ayes 13. Noes 0.) (April 18). |
| Apr 16, 2018 | Re-referred to Com. on INS. |
| Apr 12, 2018 | From committee chair, with author's amendments: Amend, and re-refer to Com. on INS. Read second time and amended. |
| Mar 1, 2018 | Referred to Com. on INS. |
| Feb 14, 2018 | From printer. May be heard in committee March 16. |
| Feb 13, 2018 | Read first time. To print. |
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Date
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Description
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Location
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Votes
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| Jun 25, 2018 | Consent Calendar AB2229 | Senate Floor |
Passed |
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| Jun 13, 2018 | Do pass and be ordered to the Consent Calendar | Senate Standing Committee on Insurance |
Passed |
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| Apr 26, 2018 | AB 2229 WOOD Consent Calendar Second Day Regular Session | Assembly Floor |
Passed |
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| Apr 18, 2018 | Do pass. To Consent Calendar. | Assembly Standing Committee on Insurance |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
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Organization
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Position
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Date
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|---|---|---|
| California Association Of Realtors | ** Support | Jun 15, 2018 |
| California State Association Of Electrical Workers | ** Support | Jun 15, 2018 |
| Coalition of California Utility Employees | ** Support | Jun 15, 2018 |
| Medtronic | ** Support | Jun 15, 2018 |
| Working Families For Affordable Insurance | ** Support | Jun 15, 2018 |
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB |
CONSENT
Bill No: AB 2229
:
SENATE INSURANCE COMMITTEE: 11-0, 6/13/18
AYES: Glazer, Gaines, Galgiani, Hernandez, Hueso, Lara, Mitchell, Moorlach, Morrell, Portantino, Roth
NO VOTE RECORDED: Berryhill, Newman
ASSEMBLY FLOOR: 74-0, 4/26/18 (Consent) - See last page for vote
DIGEST:
This bill requires a residential property insurer to disclose any fire safety discounts it offers upon offer or renewal of a homeowner's insurance policy on or after January 1, 2020.
Existing law:
- Requires an insurer to provide the Residential Property Insurance Disclosure (RPID) when issuing or renewing a homeowner's insurance policy.
- Requires the RPID to include information explaining coverage option choices, including actual cash value, replacement cost, extended replacement cost, guaranteed replacement cost, and building code upgrade coverages, and information regarding factors to be considered by the homeowner when selecting coverage limits as, specified.
- Requires an insurer to provide the California Residential Property Insurance Bill of Rights (Bill of Rights) when it provides the RPID.
- Specifies the content of the Bill of Rights including a range of additional information regarding homeowner's insurance.
This bill:
- Requires the RPID form to include information regarding any fire safety discounts offered by the insurer.
- Delays implementation until January 1, 2020.
Background
There are many steps a homeowner can and should take to reduce the risk of major damage to their home from a fire, particularly if the home is located in the wildland–urban interface. Homeowners who take proactive steps to reduce their homes’ vulnerability have a far greater chance of having their homes withstand a wildfire. Such defensive measures may also be key to finding an insurer willing to offer homeowners’ insurance. These include removing brush and vegetation to create significant defensible space, having access to sufficient water supply, installing non-combustible roofing and siding, improving attic and crawl space vent screens, enclosing eaves and soffits, and upgrading windows. Some insurers offer fire safety discounts to homeowners with specific fire safe features.
Many homeowners may not be aware of the effect mitigation efforts could have on their insurance, or even the ability to get insurance, and may not see the value of making such changes. This bill will make sure homeowners understand how mitigation measures might enhance their ability to obtain insurance or reduce its cost in high fire risk areas.
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
California Association of Realtors
California State Association of Electrical Workers
Coalition of California Utility Employees
Medtronic
Working Families for Affordable Insurance
OPPOSITION: (Verified 6/13/18)
None received
ARGUMENTS IN SUPPORT: According to Medtronic, AB 2229 will help ensure that fire safety insurance premium discounts are fully disclosed to policyholders. As another fire season approaches, these discounts can provide the incentives homeowners need to address fire hazards in and around their homes. Improving fire safety such as removing brush, installing non-combustible building materials can help reduce the risk of future fires throughout the North Bay and California.
ASSEMBLY FLOOR: 74-0, 4/26/18
AYES: Acosta, Aguiar-Curry, Arambula, Baker, Berman, Bigelow, Bloom, Bonta, Brough, Burke, Caballero, Calderon, Carrillo, Cervantes, Chau, Chávez, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Dahle, Daly, Eggman, Flora, Frazier, Friedman, Gallagher, Eduardo Garcia, Gipson, Gloria, Gonzalez Fletcher, Gray, Grayson, Harper, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Quirk, Quirk-Silva, Reyes, Rubio, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Voepel, Waldron, Weber, Wood, Rendon
NO VOTE RECORDED: Travis Allen, Fong, Cristina Garcia, Rodriguez
6/15/18 11:13:00
**** END ****
SENATE COMMITTEE ON
Senator Steven Glazer, Chair
2017 - 2018 Regular
Bill No: Hearing Date: June 13, 2018
Author: | |||
Version: |
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Urgency: | Fiscal: | ||
Consultant: | |||
Subject:
SUMMARY
Requires a residential property insurer to disclose any fire safety discounts it offers upon renewal of a homeowner's insurance policy on or after January 1, 2020.
DIGEST
Existing law
- Requires an insurer to provide the Residential Property Insurance Disclosure (RPID) when issuing or renewing a homeowner's insurance policy.
- Requires the RPID to include information explaining coverage option choices, including actual cash value, replacement cost, extended replacement cost, guaranteed replacement cost, and building code upgrade coverages, and information regarding factors to be considered by the homeowner when selecting coverage limits as, specified.
- Requires an insurer to provide the California Residential Property Insurance Bill of Rights (Bill of Rights) when it provides the RPID.
- Specifies the content of the Bill of Rights including a range of additional information regarding homeowner's insurance.
This bill
- Requires the RPID form to include information regarding any fire safety discounts offered by the insurer.
- Delays implementation until January 1, 2020.
COMMENTS
- Purpose of the bill According to the author, current law falls short of requiring insurance companies to disclose available fire safety discounts. This bill will serve to inform property owners of existing incentives to carry out fire-safe practices or to invest in upgrades that will help protect properties from the increasing frequency and intensity of fires in California.
- Background There are many steps a homeowner can and should take to reduce the risk of major damage to their home from a fire, particularly if the home is located in the wildland–urban interface. Homeowners who take proactive steps to reduce their homes’ vulnerability have a far greater chance of having their homes withstand a wildfire. Such defensive measure may also be key to finding an insurer willing to offer homeowners’ insurance. These include removing brush and vegetation to create significant defensible space, having access to sufficient water supply, installing non-combustible roofing and siding, improving attic and crawl space vent screens, enclosing eaves and soffits, and upgrading windows. Some insurers offer fire safety discounts to homeowners with specific fire safe features.
Many homeowners may not be aware of the effect mitigation efforts could have on their insurance, or even the ability to get insurance, and may not see the value of making such changes. This bill will make sure homeowners understand how mitigation measures might enhance their ability to obtain insurance or reduce its cost in high fire risk areas.
Not all insurers offer discounts on insurance for mitigation efforts by homeowners, however, particularly in high and extreme wildfire risk areas. Many claim they already take such measures into account in their underwriting and pricing. They also argue that mitigation other than actual home reinforcement, such as brush clearance and creation of a perimeter, must be maintained to be effective or may be dependent on the actions of neighbors or others. In addition, in order to offer discounts, insurers must include sufficient data in their rate application to demonstrate the actuarial reduction in losses produced by the specific mitigation efforts for which a discount is offered. Insurers maintain that mitigation will have little impact in reducing losses in certain kinds of fires, including those driven by high winds such as in the Tubbs and Thomas fires. The fires of 2017 likely have reinforced some insurers’ views that such mitigation measures provide little protection against loss with the kinds of fires the state now seems to be facing—fueled by high winds and extensive fuel build-up.
- Support According to Medtronic, AB 2229 would help ensure that fire safety insurance premium discounts are fully disclosed to policyholders. As another fire season approaches, these discounts can provide the incentives homeowners need to address fire hazards in and around their homes. Improving fire safety such as removing brush, installing non-combustible building materials can help reduce the risk of future fires throughout the North Bay and California
- Opposition None received
- Prior and Related Legislation
SB 824 (Lara) Prohibits an insurer from canceling or refusing to renew a homeowners’ insurance policy for one year from the date of a declaration of a state of emergency; and directs the CDI to conduct a data call on wild fire and fire loss experience from insurers writing homeowners’ insurance.
SB 894 (Dodd) after a total loss of a home in a declared disaster area, requires an insurer to renew a residential insurance policy for at least two annual renewal periods or 24 months, whichever is greater, requires an insurer to grant an additional 12-month extension for a total of 36 months for additional living expense if an insured acting in good faith and with reasonable due diligence encounters a delay, subject to policy limits, allows an insured to combine payments for actual losses up to the policy limits for the primary dwelling, other structures and contents, limited to the amount necessary to rebuild or replace the home if the policy limits for the dwelling are insufficient, specifies that the payments for losses under this provision shall be full replacement value without requiring the replacement of the other structures or contents.
SB 917 (Jackson) Provides that if loss or damage results from a combination of perils, one of which is a landslide, coverage shall be provided if an insured peril is the efficient proximate cause of the loss or damage.
AB 1722 (Aguiar-Curry) Extends the minimum time to rebuild or replace after a declared disaster from 24 to 36 months.
AB 1797 (Levine) Requires insurers to provide an biennial estimate of replacement costs to the insured at the time of policy renewal.
AB 1799 (Levine) Requires an insurer to provide a full copy of an insurance policy upon request after a covered loss.
AB 1800 (Levine) Prohibits, in the event of a total loss, a residential property insurance policy from containing a provision that limits or denies payment of building code upgrade cost or replacement cost, including extended replacement cost, to the extent those costs are otherwise covered under the policy, based on the fact the insured has chosen to rebuild or purchase a home at a new location.
AB 1875 (Wood) Requires CDI to create an insurance finder tool, and requires an insurer to refer a customer to an alternate source of insurance when the insurer declines to offer extended replacement coverage.
AB 2594 (Friedman) Revises the standard form policy and extends the period in which to bring suit from 12 to 24 months after inception of the loss if the loss was related to a state of emergency.
POSITIONS
Support
California Association of Realtors
California State Association of Electrical Workers
Coalition of California Utility Employees
Medtronic
Working Families for Affordable Insurance
Oppose
None received
-- END --
Date of Hearing: April 18, 2018
ASSEMBLY COMMITTEE ON INSURANCE
Tom Daly, Chair
ABPCA Bill Id:AB 2229 (
Author:Wood) – As Amended Ver:April 12, 2018
SUBJECT: Fire insurance: Discounts
SUMMARY: Requires a residential property insurer to disclose any fire safety discounts it offers upon renewal of a homeowner's policy. Specifically, this bill:
- Requires the Residential Property Insurance Disclosure (RPID) form to include information regarding any fire safety discounts offered by the insurer.
- Delays implementation of this requirement until January 1, 2020.
EXISTING LAW:
- Requires an insurer to provide the RPID when issuing or renewing a homeowner's insurance policy.
- Requires the RPID to include a range of information regarding the nature of coverages included in a homeowner's policy and information regarding factors to be considered by the homeowner when selecting coverage limits.
- Requires an insurer to provide the California Residential Property Insurance Bill of Rights (Bill of Rights) when it provides the RPID.
- Specifies the content of the Bill of Rights including a range of additional information regarding homeowner's insurance.
FISCAL EFFECT: Undetermined
COMMENTS:
- Purpose. According to the author, current law falls short of requiring insurance companies to disclose available fire safety discounts. As California’s fire seasons continue to lengthen and build in intensity, it is vital that home owners have every incentive available to invest in fire safe practices.
- Fire Safety. There are many steps a homeowner can take to increase the fire safety of their home. These include removing brush and vegetation to create defensible space, having access to sufficient water supply, installing non-combustible roofing and siding, improving attic and crawl space vent screens, enclosing eaves and soffits, and upgrading windows. Some insurers offer fire safety discounts to homeowners with specific fire safe features.
- Suggested Amendment. The author may want to consider amending the bill to require the RPID and the Bill of Rights be placed immediately after the declarations page in the packet of materials provided to the policyholder on issuance and renewal of the policy. While each of the required disclosure documents an insurer provides has a valid purpose, the recent wildfire experiences have shown that these "scope of coverage" documents may be the most important.
REGISTERED SUPPORT / OPPOSITION:
Support
None received
Opposition
None received
Analysis Prepared by: Paul Riches / INS. / (916) 319-2086
Bill Author
Bill Co-Author(s):