Senator Allen advances two measures to improve how insurance can work for Californians

SACRAMENTO – Senator Ben Allen (D-Pacific Palisades) advanced SB 1209 and SB 1301 out of committee this week to provide stronger protections for policyholders, ensuring the system is ready to work for Californians when they are most vulnerable.

“The dysfunction exposed in the insurance market over the past year requires our urgent attention in Sacramento,” said Senator Allen. “Too many families are losing coverage without explanation, leaving them in the dark on how to proceed, and lax enforcement authority is failing to hold insurers accountable to the law. This needs to change.”

Insurers are required to provide a nonrenewal notice to a policyholder when they decide not to extend their coverage for another year. Californians face the fourth highest rate of nonrenewals in the country due to increasing risk, leaving families scrambling to find new coverage or turning to the FAIR Plan as a last-resort option, which has increased its exposure by 230 percent since 2022. Problematically, these notices often do not detail why a policy is being dropped for the coming year.

SB 1301 requires nonrenewal notices to explain the decision to drop coverage and provide policyholders with an opportunity to maintain their existing coverage if they mitigate the property risk identified by the insurer.

“Families need more information,” said Allen. “We can’t expect them to know why they’ve been deemed too risky without these details from their insurer. This transparency will empower more Californians to appropriately reduce their risk and improve insurability.”

The Department of Insurance’s deficient enforcement authority additionally fails to adequately protect policyholders. While the Department may identify operational and compliance concerns directly with insurers through routine examinations, insurers are not required to correct their practices. This may inevitably harm Californians when disaster strikes.

A 2025 examination of the FAIR Plan discovered that less than half of recommendations provided from a 2022 exam report were implemented, resulting in numerous reports of unfair claims denials, outdated underwriting guidelines, and financial distress in the wake of the LA Fires.

SB 1209 establishes timeframes by which California-based insurers are required to resolve concerns identified by Department examinations before fines up to $20,000 may be levied.

This reform comes on the heels of Senator Allen receiving bipartisan support for improving risk reduction efforts across California’s communities.

“The insurance market is not going to heal on its own,” Allen concluded. “From risk reduction to good-faith coverage, we all need to be doing our part to re-stabilize the system.”

SB 1209 and SB 1301 will both be voted on in the Senate Appropriations Committee in the coming weeks.