Residential property insurance.

Existing law generally regulates classes of insurance, including fire and property insurance. Existing law requires a residential property insurer to allow an insured that has suffered a loss relating to a declared state of emergency to combine the policy limits for primary dwelling and other structures, and to use the combined amount to rebuild or replace the dwelling, as specified. Existing law requires a policy to provide coverage for additional living expenses for a period of no less than 24 months from the inception of the loss, for a loss relating to a state of emergency. Existing law prohibits, in the event of a total loss of the insured structure, a policy from limiting or denying payment of the building code upgrade cost or the replacement cost on the basis that the insured has decided to rebuild at a new location or to purchase an already built home at a new location. For a total loss of a furnished residence related to a declared state of emergency, this bill would require an insurer to provide a payment for contents of no less than 30% of the policy limit, as specified, without requiring an itemized claim. For a covered loss relating to a state of emergency, on and after July 1, 2021, the bill would prohibit a policy that provides coverage for additional living expenses from limiting the policyholder's right to recovery if the insured home is rendered uninhabitable by a covered peril, but would authorize an insurer to provide a reasonable alternative remedy that addresses the property condition that precludes reasonable habitation of the insured premises. On and after July 1, 2021, the bill would require additional living expense coverage to be provided for at least 2 weeks, with additional 2-week extensions, in the event of a state of emergency and an order of civil authority restricting access to the home, as specified. The bill would require the measure of damages available to a policyholder to use to rebuild or replace the insured home at another location to be the amount that would have been recoverable had the insured dwelling been rebuilt at its original location, without deduction for the value of land at the new location. Existing law requires the Insurance Commissioner to establish the California Home Insurance Finder on the Department of Insurance internet website to connect homeowners in need of insurance assistance to an insurance agent or broker for residential property insurance. Under existing law, the California FAIR Plan Association, a joint reinsurance association in which all insurers licensed to write basic property insurance participate, administers a program for the equitable apportionment of basic property insurance for persons who are unable to obtain that coverage through normal channels. Existing law requires an insurance agent or broker to assist a person to obtain property insurance coverage by one of several specified methods. This bill would require a notice of nonrenewal for a residential property insurance policy expiring on or after July 1, 2021, to be accompanied by a specified statement that includes an explanation of how the California Home Insurance Finder can help a person find a homeowners' insurance policy and information about FAIR Plan policies. The bill would require the California FAIR Plan Association, on or before July 1, 2021, to develop and implement a clearinghouse program to help reduce the number of existing FAIR Plan policies and provide the opportunity for admitted insurers to offer homeowners' insurance policies to FAIR Plan policyholders. The bill would require an insurer that participates in the clearinghouse program to sign an agreement that sets forth the terms and conditions for the insurer to offer homeowners insurance through the policy's listed agent or broker of record. Existing law creates the California Insurance Guarantee Association (CIGA) and requires all insurers admitted to transact specified insurance lines in this state to become members. Under existing law, CIGA pays and discharges covered claims, which are the obligations of an insolvent insurer that meet specified requirements, including, for a policy of workers' compensation insurance, that the obligation is to provide workers' compensation benefits under California's workers' compensation law. Under existing law, an obligation to a state or to the federal government is not a covered claim. Existing law requires CIGA to collect premium payments from its member insurers sufficient to discharge its obligations. Existing law requires CIGA to adopt a plan of operation that requires a member insurer to recoup the premium charge paid by the member insurer through a surcharge on premiums charged for insurance policies. Existing law requires CIGA to reimburse member insurers who report surcharge collections that are less than what they paid in the preceding year's premium charge. This bill would expand covered claims under CIGA to include benefits under the workers' compensation law of any state if the injured worker is a California resident and not otherwise entitled to coverage from another organization similar to CIGA, obligations for medical services provided by a medical facility owned in whole or in part by a state or federal agency, and claims arising under a policy that has been statutorily allocated to or assumed by a company that is later placed in liquidation if the claim would have been a covered claim if the original company had been placed in liquidation. The bill would require each member insurer to file a report to CIGA within 90 days after filing an annual statement indicating the amount of premiums not subject to CIGA's premium charge and the amount of special excess workers' compensation premiums for the preceding calendar year. The bill would authorize an insurer to amend its reports indicating the amount of surcharges collected for the prior 5 years if it discovers there was an error in the original reports. This bill would incorporate additional changes to Section 678 of the Insurance Code proposed by AB 2756 to be operative only if this bill and AB 2756 are enacted and this bill is enacted last.