Proposed California Home Insurance Reform Bills Advance in State Senate

California homeowners struggling with delayed insurance claim payments, underpayments, and non-renewals could see some relief if a trio of bills moving through the state senate become law.

One bill would require home insurance companies to provide homeowners with more detailed reasoning and more time to respond when their insurer decides to non-renew a policy. Another would require insurers to disclose more detail around loss estimates when the insurer pays less than the requested claim amount.

The third would impose a 20% penalty on late claim payments.

All three bills are with the Senate Appropriations Committee, after passing Insurance Committee review.

The Insurance Committee rejected a fourth home insurance bill that would have barred insurers from refusing to cover homes that meet minimum home hardening and wildfire mitigation standards.

The average annual cost of home insurance in California was $2,455 at the end of 2025, according to Insurify’s 2026 Insuring the American Homeowner Report. The state’s average is below the national average, and it’s the 23rd most expensive state for home insurance. However, Insurify data analysts predict homeowners could see a 16% increase in home insurance rates by the end of 2026.

What these bills would do for California homeowners

Under SB 1301, insurers that elect to not renew a homeowners policy or that reduce a policy’s limits or coverages must:

• Clearly explain to affected policyholders the reasons for the insurer’s decision

• Refer to the specific provision in the insurer’s underwriting guidelines that justifies its decision

• Provide policyholders with all information the insurer used in making its decision, including any images and documentation

The bill also extends notification requirements. California law requires insurers to provide non-renewal notices at least 75 days before a policy’s expiration date, and at least 45 days if the insurer chooses to renew a policy. Under SB 1301, insurers would have to provide renewal notices at least 90 days before expiration and give at least 180 days’ notice if the insurer opts to non-renew a policy.

If passed, the bill would take effect July 1, 2027.

SB 877, which would take effect Jan. 1, 2027, requires insurers to share with claimants every version of each document it possesses related to the claim within 15 calendar days of creating the document. Insurers would also have to disclose the full name and title of every person who created a document, ordered its creation, reviewed it, and approved it.

Finally, SB 878 would force insurance companies that miss deadlines for responding to and accepting or denying a claim to pay an annual 20% penalty to affected policyholders, plus the claim amount, and “reasonable and necessary attorney’s fees.”

The Insurance Committee, with votes along party lines, approved all three bills and sent them to the Senate Appropriations Committee for review. The bills weren’t on the committee’s April 27 agenda. The Appropriations Committee will meet again on Monday, May 4. The agenda for that meeting will be available on Friday, May 1.

Fourth time isn’t the charm

The Insurance Committee rejected a fourth bill that would have required insurers to cover homes in areas with high wildfire risks if the homeowner made wildfire-resistant home and landscaping improvements. It was the fourth time since 2020 that such legislation failed to win approval from state legislators.

Sen. Sasha Renée Pérez, who represents the Eaton areas hardest hit by January 2025 wildfires, introduced the measure in February 2026. Faced with industry opposition, Pérez significantly amended the bill, despite support from multiple consumer advocacy groups.

The Insurance Committee rejected the amended bill on April 23.

What’s next? Three bills advance in committee

The three remaining home insurance measures are now in the hands of the state Senate’s Appropriations Committee, which reviews all bills that could affect the state’s finances. The committee can approve bills, which then move to a second reading on the Senate floor.

If the committee rejects the bill or suspends it for consideration, the bill generally dies.

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