California, September 23, 2025
News Summary
The Consumer Watchdog group has proposed the Insurance Policyholder Bill of Rights in California, which aims to protect homeowners from insurance cancellations linked to wildfire risks. Under this bill, insurers must provide coverage to fireproofed homes and allow 180 days for repairs if policyholders face cancellations. Non-compliance could lead to a five-year ban on selling home or auto insurance in the state. The proposal reflects ongoing challenges within California’s home insurance market amid rising wildfire incidents and related lawsuits against insurers.
California
The consumer advocacy group Consumer Watchdog has introduced the Insurance Policyholder Bill of Rights in California, aiming to safeguard homeowners against insurance coverage losses related to wildfire risks. This initiative mandates that insurers provide coverage to homeowners who take measures to fireproof their residences.
If insurance companies fail to comply with this regulation, they risk losing the right to sell home or auto insurance in California for five years. The proposal was filed last week with California Attorney General Rob Bonta’s office and seeks a place on the ballot for the November 2026 election.
Under the proposed bill, policyholders who have their coverage canceled by insurers would be allowed 180 days to make necessary repairs and enhancements to their homes. The initiative specifically targets the recurring issue of policy cancellations following claims associated with wildfire damage.
Harvey Rosenfield, the founder of Consumer Watchdog and the author of Proposition 103, endorses the initiative as a means to ensure that homeowners investing in wildfire mitigation efforts retain their insurance protection. This measure comes at a time when two lawsuits have been filed in Los Angeles County Superior Court against home insurers in California, alleging unfair practices such as dropping policyholders and forcing them onto the state’s FAIR Plan, California’s insurer of last resort.
The FAIR Plan offers coverage but is often more costly and provides limited benefits compared to traditional policies. Insurers are permitted to request six-month waivers of the coverage requirement in areas deemed to have an overconcentration of risk.
The Insurance Policyholder Bill of Rights reflects ongoing challenges faced by California’s home insurance market, which has experienced substantial withdrawals by insurers seeking to raise rates significantly while managing increasing wildfire risks. Carmen Balber, the executive director of Consumer Watchdog, acknowledged the uncertainty surrounding whether the group will secure the 500,000 signatures required to qualify for the ballot.
Further complicating the situation, an alternative proposal by insurance broker Elizabeth Hammack seeks to repeal critical reforms under Proposition 103. Hammack’s initiative aims to permit insurers to implement rate hikes without prior approval from the insurance commissioner and would mandate that the insurance commissioner possess a minimum of five years of insurance-related experience.
The California home insurance landscape is currently marred by numerous complaints regarding claims handling, particularly following the devastating fires on January 7 that resulted in significant property losses for homeowners. Many residents expressed their frustration with the claims processes of State Farm, California’s largest home insurer.
In response to these challenges, Governor Gavin Newsom has called on the FAIR Plan to expedite and process smoke damage claims from the January fires in a fair manner. The California Department of Insurance has recently taken legal actions concerning the state’s insurer of last resort, particularly regarding the denial of smoke damage claims—a sentiment echoed by the public amid rising anger over the treatment of claims following the lethal January firestorms that resulted in over 30 fatalities.
Frequently Asked Questions
What is the Insurance Policyholder Bill of Rights?
The Insurance Policyholder Bill of Rights is a proposed initiative that requires insurers to offer coverage to California homeowners who fireproof their homes and gives policyholders 180 days to make necessary repairs if their coverage is canceled.
What happens to insurers who do not comply with the new regulations?
Insurers that fail to comply with the regulations would lose the right to sell home or auto insurance in California for five years.
Why was this initiative proposed?
The initiative was prompted by ongoing issues of coverage cancellations due to wildfire risk and seeks to protect homeowners who invest in fire mitigation efforts.
What has been the reaction from homeowners regarding claims handling?
Homeowners have expressed frustration with insurers, particularly following the January 7 fires, as there have been widespread complaints regarding claims handling.
Key Features of the Initiative
| Feature | Description |
|---|---|
| Insurance Coverage Requirement | Insurers must offer coverage to homeowners who fireproof their homes. |
| Consequences for Non-compliance | Insurers can lose the right to sell home or auto insurance in California for five years. |
| Coverage Cancellation Provisions | Policyholders not renewed would have 180 days for necessary home repairs. |
| Alternative Proposals | Competing initiative seeks to allow insurers to raise rates without prior approval. |
| Legal Challenges | Two lawsuits filed against insurers for dropping policyholders and forcing them onto the FAIR Plan. |
Deeper Dive: News & Info About This Topic
- Los Angeles Times: Insurance Rights Initiative Proposed
- U.S. News: Homeowners Insurance in California
- LAist: California Insurance Ballot Initiative
- The New York Times: Fire Home Insurance Legislation
- JD Supra: California Enacts New Insurance Law
- Wikipedia: Insurance in California
- Google Search: California Insurance Policyholder Bill of Rights
- Encyclopedia Britannica: Insurance
- Google News: California Insurers and Wildfires
Author: STAFF HERE COSTA MESA WRITER
COSTA MESA STAFF WRITER The COSTA MESA STAFF WRITER represents the experienced team at HERECostaMesa.com, your go-to source for actionable local news and information in Costa Mesa, Orange County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the OC Fair, Concerts in the Park, and Fish Fry. Our coverage extends to key organizations like the Costa Mesa Chamber of Commerce and Boys & Girls Clubs of Central Orange Coast, plus leading businesses in retail, fashion, and technology that power the local economy such as Vans, Experian, and South Coast Plaza. As part of the broader HERE network, including HEREAnaheim.com, HEREBeverlyHills.com, HERECoronado.com, HEREHollywood.com, HEREHuntingtonBeach.com, HERELongBeach.com, HERELosAngeles.com, HEREMissionViejo.com, HERESanDiego.com, and HERESantaAna.com, we provide comprehensive, credible insights into California's dynamic landscape.
