Gov. Gavin Newsom has signed AB 3012 by Assembly member Jim Wood, D-Santa Rosa, a law that will provide several protections to homeowners recovering from a loss of their home due to wildfire.

Over the past several years, insurance companies have adjusted to catastrophic wildfires by reducing the number of properties they insure in areas at higher risk of fire.

As the definition of a fire-prone community has evolved, the changing insurance climate has impacted property owners across the state. More property owners are being non-renewed by their insurance company and are being forced on to the significantly more expensive FAIR Plan (California Fair Access to Insurance Requirements) often referred to as the insurance plan of last resort.

One of the protections this bill provides is it prohibits insurers from deducting the land value of the insured property if insureds choose to rebuild or replace the insured dwelling in a different location.

“It’s totally understandable that someone might choose not to stay in a high-fire risk area and they should have that choice,” Wood said.

The bill also extends coverage for additional living expenses if the home is not inhabitable or usable due to insufficient infrastructure, such as in the community of Paradise where there were problems with the water system.

“We have seen communities so devastated by wildfire that the utilities they need are not operable, even though their home might be habitable, and they need this extension,” said Wood.

The bill also creates a process and minimum ratio, 30 percent of coverage A limits, for contents replacement value insureds can collect without submitting an itemized claim if the loss occurred.

“When homeowners are forced to leave with practically no warning, with literally the shirts on their backs, they likely had to leave behind important documents and receipts. This bill gives them an opportunity to buy essentials they need to begin to rebuild their lives,” Wood said.

This bill will also require the FAIR Plan, by July 1 2021, to develop a clearinghouse to help reduce the number of insureds on the FAIR Plan and strengthen provisions surrounding the California Home Insurance Finder which was established pursuant to AB 1875 (Wood-2018).

“Governor Newsom has seen firsthand the devastation and havoc these wildfires have wreaked on people, and I’m grateful that he has signed this bill, and others, to help people get back on their feet as soon as possible.”

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