By City News Service, SPECTRUM NEWS CALIFORNIA
LOS ANGELES — A nonprofit representing thousands of Southern California residents impacted by the January 2025 wildfires criticized Gov. Gavin Newsom Monday for vetoing a pair of bills supporters said would give policyholders greater transparency and accountability when insurance companies delay or underpay claims.
Every Fire Survivors Network, which bills itself as a survivor-led nonprofit serving 10,000-plus survivors and allies of the Eaton and Palisades fire, said Newsom vetoed SB 877 and SB 878. The bills were crafted in response to frustrations of fire survivors who experienced delays or underpayments from their insurance companies, and which ultimately were obstacles in their recovery, according to the nonprofit.
“We paid our premiums for years. Then disaster came, and too many of us discovered that having insurance and getting the benefits we paid for are two very different things. Survivors sought help from our government to hold insurance companies accountable and put basic protections in place so every Californian can get what we paid for when the worst happens,” EFSN Executive Director Joy Chen said in a statement.
The nonprofit worked with Consumer Watchdog to collaborate with state lawmakers on the two bills, as well as the California Department of Insurance and industry representatives. The bills were introduced by Sen. Sasha Renée Pérez, D-Pasadena, and co-authored by state Sen. Ben Allen, D-El Segundo.
SB 877 would have required insurers to show policyholders their original loss estimates and revisions, so people could see changes that can result in underpayments.
SB 878 would have required insurers to put decisions in writing and pay interest when they delay money owned to their policyholders. The bill passed with overwhelming bipartisan support in the Legislature, according to the nonprofit.
“These were basic protections: tell us how our claims are being valued, explain your decisions, and pay us what we are owed on time,” Chen said.
“Gov. Newsom’s vetoes leave every California who depends on insurance more vulnerable to the same practices that kept LA fire survivors from rebuilding our homes and lives. When insurance fails after disaster, families cannot rebuild, communities cannot recover, and California’s housing crisis gets worse,” Chen added.
A representative for Newsom’s office did not immediately respond to a request for comment.
In his veto statement, Newsom argued that regulations imposed by California Insurance Commissioner Ricardo Lara, under the “Sustainable Insurance Strategy,” made the bills “unnecessary at this time.”
Consumer Watchdog, however, stated that the commissioner’s regulations have nothing to do with insurance claims-handling for the delays and underpayments directly addressed by SB 877 or SB 878.
In an analysis released last week, Consumer Watchdog found that the regulations created by Lara failed to improve insurance availability. Insurance companies sought over $570 million in rate hikes under the regulations, but promised to add just 12,000 new insurance policies in a state where hundreds of thousands of homeowners have lost their insurance, according to Consumer Watchdog.
“Honest estimates and timely payment of insurance claims can mean the difference between Californians getting home and financial ruin. SB 877 and 878 gave wildfire survivors critical new rights to hold insurance companies to their end of the deal,” Consumer Watchdog Executive Director Carmen Balber said in a statement. “Their veto appears to be a retaliation against wildfire victims who stood up against Governor Newsom taking their rights during the last month of session. It’s unbecoming of a public official.”
Newsom did sign SB 1301, authored by Allen, which gave California homeowners stronger protections against non-renewals.
“Next year, we will be back. Survivors, Consumer Watchdog and our allies in the Legislature will work with California’s new governor to get these protections into law,” Chen said. “We turned the failures we experienced into protections for every Californian once. We will do it again.”
