SB 1301 (Allen) Advances to Assembly for Consideration to Mitigate Nonrenewals

SACRAMENTO – Senator Ben Allen (D-Pacific Palisades) advanced SB 1301 through the Senate before Friday’s deadline. The measure provides property owners with more time and opportunity to maintain their insurance coverage before being dropped by their provider.

“Affordable and available property insurance is a necessary element to keeping families housed, but this rug is being pulled out from under too many Californians,” said Senator Allen. “Residents and insurers need a clearer path to work hand-in-hand to reduce risk, improve insurability, and maintain existing coverage.”

California policyholders face the fourth highest rate of nonrenewals in the nation. Meanwhile, the FAIR Plan, which serves as the insurer of last resort, has seen its total exposure increase by 230 percent since 2022 as a result of this loss of private coverage. Residents across the entire state subsidize the FAIR Plan through their own insurance premiums which rise in cost as the FAIR Plan takes on more risk.

SB 1301 provides a stronger path for residents to keep their existing policy or find another option in the private market rather than resorting to the FAIR Plan. The proposal requires insurers to provide a notice of nonrenewal three months before dropping a policyholder’s coverage, giving them more time to find new coverage. Additionally, it requires the notice to detail why the policyholder is being dropped and provide a path to maintain their current coverage through property repairs and remediations.

Reports of Californians losing coverage over incorrect details – such as wrongly identified mold by drone footage – have proliferated over recent years. Including reasons for dropping coverage would help more people identify misguided nonrenewal decisions and work with insurers to correct the information and stay covered.

“Californians need to know why they’re at risk of losing coverage; otherwise, we won’t know what tangible steps we can take to reduce our property’s risk,” concluded Allen. “This transparent communication is long overdue.”

SB 1301 will be heard in Assembly Insurance Committee in the coming weeks.