Summary of April 22 Zoom Seminar with CA Insurance Commissioner

Commissioner Lara Townhall Highlights

Summary of April 22 Zoom Seminar with CA Insurance Commissioner Ricardo Lara and Deputy Commissioner Tony Cignarale

Overview:
Commissioner Ricardo Lara and Deputy Commissioner Tony Cignarale addressed wildfire insurance challenges in California, focusing on claims handling, the FAIR Plan, consumer rights, and ongoing reforms to stabilize the insurance market. The session provided practical guidance for wildfire victims and outlined new legislative and regulatory efforts to improve insurance outcomes.

Key Points

1. Consumer Rights and Claims Handling

• The Department of Insurance (CDI) emphasized that all insurers, including the FAIR Plan, must thoroughly investigate claims—including smoke damage—and cannot deny claims without proper review. Consumers experiencing delays, denials, or lack of communication should contact CDI for assistance.
  
• Keeping detailed documentation and written communication with adjusters is essential. If a claim is denied or underpaid, consumers should request written explanations and can submit independent contractor estimates to challenge insurer determinations.
  
• If an insurer changes adjusters multiple times, they are required to provide a summary to ensure continuity and prevent consumers from starting over with each new adjuster.
  

2. Total Loss and Rebuilding Guidance

• Policyholders with total losses are entitled to full replacement cost benefits, including extended coverage and code upgrades, whether they rebuild on the same lot, a new lot, or buy a new home—land value is not deducted.
  
• If a home is a total loss, insurers must renew the policy for at least two renewal cycles (24 months), and a one-year moratorium on non-renewals applies to all properties in and around declared wildfire disaster areas.
  

3. Smoke Damage and Environmental Testing

• Insurers must cover reasonable testing and cleaning for smoke and ash damage, and CDI is monitoring for improper denials or insufficient remediation offers.
  
• There is no specific law dictating smoke remediation standards, so CDI is working with public health agencies to clarify guidance and ensure consumer protection.
  

4. Legislative and Regulatory Reforms

• The “Eliminate the List” bill would require insurers to pay 100% of personal property (contents) coverage after a total loss without requiring an itemized inventory, and extend the deadline for proof of loss documents from 60 to 180 days.
  
• Recent reforms allow for forward-looking risk modeling, greater transparency in rate reviews, and modernization of the FAIR Plan to stabilize the market and expand insurance availability.
  

5. Market Stability and Rate Increases

• CDI is reviewing rate increase requests (e.g., State Farm’s 22% interim rate), requiring full justification and consumer protections. Insurers are being asked to suspend non-renewals and demonstrate commitment to California through capital infusions and responsible practices.
  
• The department’s goal is to reduce reliance on the FAIR Plan and attract more insurers back to the market by supporting mitigation and resilience efforts1.
  

6. Mitigation, Discounts, and Community Action

• Homeowners are encouraged to pursue wildfire mitigation (e.g., defensible space, fire-resistant building materials) to qualify for insurance discounts and improve insurability. CDI is advocating for legislation to provide financial assistance (up to $10,000) for home hardening in high-risk areas.
  
• Communities can become “Firewise” to further reduce risk and support broader insurance access.
  

7. Support and Resources

• CDI offers a hotline (800-927-4357), live chat, and online complaint forms for consumers needing help with insurance issues, including mediation services for unresolved disputes.
  
• The department is planning more in-person workshops and educational events to support wildfire survivors and ensure claims are paid promptly.
  

Conclusion:
Commissioner Lara and Deputy Commissioner Cignarale stressed the importance of consumer vigilance, documentation, and direct engagement with CDI to resolve insurance issues. They highlighted new reforms and ongoing advocacy to protect wildfire victims, improve claims outcomes, and restore stability and fairness to California’s insurance market.