Committee advances SB 876 to strengthen claims handling, restitution and living-cost coverage after disasters
June 24, 2026 | California State Assembly, House, Legislative, California
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Senator Padilla presented SB 876 to the Assembly Insurance Committee as a comprehensive response to claims-handling failures exposed by recent wildfires. He said the bill is aimed at cutting red tape, improving payouts and ending delays that have left survivors unable to rebuild.
The bill's provisions, as summarized for the committee, include requiring insurers to prepare disaster recovery plans, doubling penalties for violations of fair-claims practices during declared emergencies, mandating restitution tied to direct financial loss, offering extended replacement-cost options and additional living expenses, and requiring status reports within 15 days when a new adjuster is assigned to a claim.
The Department of Insurance backed the measure. "Californians deserve insurance coverage that functions when they need it most, not a system that leaves them underprotected, delayed, and unable to return home," Josephine Figueroa, Deputy Commissioner and Legislative Director for the Department of Insurance, told the committee. She described steps the bill would take to ensure accurate, real-world replacement-cost estimates and steps to prevent "adjuster roulette," including a 15-day reporting requirement when adjusters change.
United Policyholders and other consumer groups voiced strong support, saying dwelling limits and inadequate replacement-cost estimates have routinely left survivors unable to rebuild after catastrophic events. Joel Lauter of United Policyholders said demand surge and increased construction costs make current limits often inadequate.
Industry groups were split: some trade representatives said amendments addressed many concerns and moved to neutral; the Fair Plan reported it was still reviewing the changes and remained respectfully opposed. Supporters argued the amended bill strikes a balance between protecting policyholders and addressing insurer concerns.
Vote and next steps: The committee voted to pass SB 876 as amended to the Committee on Judiciary. The roll call recorded a majority of 'aye' votes; several members recorded 'no.' The bill will proceed to the next committee for further consideration.
The bill's provisions, as summarized for the committee, include requiring insurers to prepare disaster recovery plans, doubling penalties for violations of fair-claims practices during declared emergencies, mandating restitution tied to direct financial loss, offering extended replacement-cost options and additional living expenses, and requiring status reports within 15 days when a new adjuster is assigned to a claim.
The Department of Insurance backed the measure. "Californians deserve insurance coverage that functions when they need it most, not a system that leaves them underprotected, delayed, and unable to return home," Josephine Figueroa, Deputy Commissioner and Legislative Director for the Department of Insurance, told the committee. She described steps the bill would take to ensure accurate, real-world replacement-cost estimates and steps to prevent "adjuster roulette," including a 15-day reporting requirement when adjusters change.
United Policyholders and other consumer groups voiced strong support, saying dwelling limits and inadequate replacement-cost estimates have routinely left survivors unable to rebuild after catastrophic events. Joel Lauter of United Policyholders said demand surge and increased construction costs make current limits often inadequate.
Industry groups were split: some trade representatives said amendments addressed many concerns and moved to neutral; the Fair Plan reported it was still reviewing the changes and remained respectfully opposed. Supporters argued the amended bill strikes a balance between protecting policyholders and addressing insurer concerns.
Vote and next steps: The committee voted to pass SB 876 as amended to the Committee on Judiciary. The roll call recorded a majority of 'aye' votes; several members recorded 'no.' The bill will proceed to the next committee for further consideration.
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