SB 894: Property insurance.

Existing law requires an insurer, in the case of a total loss to the primary insured structure under a policy of residential property insurance, to offer to renew the policy at least once if the loss to the primary insured structure was caused by a disaster, as defined, and was not also due to the negligence of the insured, except as specified.

This bill would instead, under specified circumstances, require the insurer to offer to renew the policy for at least the next 2 annual renewal periods or 24 months, whichever is greater.

Existing law defines the measure of indemnity for a loss under a property insurance policy and specifies time limits under which an insured must collect the full replacement cost of the loss. Existing law prohibits a property insurance policy issued or delivered in the state from limiting or denying payment of the replacement cost of property in the event the insured decides to rebuild or replace the property at a location other than the insured premises. Existing law provides that coverage for additional living expenses incurred due to a covered loss relating to a state of emergency shall be for a period of 24 months.

This bill would require an insurer, for a policy that imposes a dollar limit on the amount of coverage provided for additional living expenses, to grant an extension of that coverage for up to 12 additional months, for a total of 36 months, if an insured acting in good faith and with reasonable diligence encounters a delay or delays in the reconstruction process that are the result of circumstances beyond the control of the insured, as specified.

This bill would require an insurer to allow an insured that has suffered a loss relating to a declared state of emergency to combine the policy limits for primary dwelling and other structures, and to use the combined amount, as specified.

The bill would make other technical, nonsubstantive changes.

This bill would incorporate additional changes to Section 675.1 of the Insurance Code proposed by SB 824 to be operative only if this bill and SB 824 are enacted and this bill is enacted last. The bill would also incorporate additional changes to Section 2051.5 of the Insurance Code proposed by AB 1772 and AB 1800 to be operative only if this bill, AB 1772, and AB 1800 are enacted and this bill is enacted last.