Legislative Update

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• On: 04/13/2024 13:11:34
• In: Latest News

During February's Legislative Conference, PCAPIA President Denise Sze, Esq. met with Jill Rice, Principal Consultant for the California Senate Committee on Insurance. At the conclusion of the session, Rice encouraged Sze to provide revisions to current regulations to include in a proposed bill by Senator Susan Rubio, Chair of the Senate Committee on Insurance (see comments submitted by Sze below).
 
Ultimately these revisions did not move forward; however, the following remarks were received from Rice:
 
“I tried to see if we could work this into a bill this year but to no avail. With your blessing, I would like to table this until next year and see if we can find an author in 2025.”
 
COMMENTS SUBMITTED
 
PCAPIA is truly grateful for the opportunity to provide Senator Rubio with consumer-friendly changes that may benefit constituents. We knew that one week would be extremely tight to present revisions as a group. We know this may not make a bill, but there are two things that should be scrutinized. The areas are bolded below for convenience. 
 
- Appraisal Language
 
In the event of a government-declared disaster, as defined in the Government Code, appraisal may be requested by either the insured or the insurance company but shall not be compelled. (Cal. Ins. Code section 2071) Page 18 Once the appraisal provision under an insurance policy is invoked, the appraisal process shall not include any legal proceeding or procedure not specified under Cal. Ins. Code section 2071. Nothing herein is intended to preclude separate legal proceedings on issues unrelated to the appraisal process. [10 Cal. Code Regs. section 2695.9(e)
 
Recommendation:  We believe that Appraisal has been beneficial to both sides so long as it's a true appraisal process as it was meant to be and not a mini trial.  Since it's helped many clients, even in a government declared disaster, compelling appraisal for both sides should not be an issue. This language should be removed as both the insurance company, and the policyholder should have the right to demand appraisal in the event of a declared disaster.
 
- California Fair Plan Smoke Language in its Current Policy
 
3. Smoke Damage
 
A. When used in this policy, “smoke damage” means sudden and accidental direct physical loss from smoke, (including airborne windborne or wind-driven combustion biproducts or particulates such as carbon, soot, ash, char, debris) that is visible to the unaided human eye, or odor from smoke or ash that is detected by the unaided human nose of an average person, and not by the subjective senses of you or by laboratory testing.
 
Smoke Damage Claims—Are Insurers Handling Smoke Claims Properly and Trying to Reduce Smoke Coverage Through New Policy Language? | Property Insurance Coverage Law Blog
 
Recommendation:  There is no doubt that smoke, soot, and ash is a byproduct of fire which is covered under the standard fire policy. This language by Fair Plan is far too subjective when science dictates that testing can easily show the true results. This language from Fair Plan is problematic for the consumer as to whose eyes or whose smell test dictates damage from these fire byproducts. Is there a way to change this in Fair Plan's policy through a bill? It is our recommendation that the last part of Fair Pan's definition of Smoke Damage “and not by the subjective senses of you or by laboratory testing” be removed and replaced with “When there is a disagreement between us (Fair plan), and our policyholder as to whether there is smoke damage, either party can request a certified hygienist be brought in to confirm the presence of soot, smoke or ash.”