Gov. Brown Signs Bill to Provide Property Replacement Cost Estimates Every Other Year
A bill signed by Gov. Brown will protect homeowners whose property may be underinsured.
When the new law takes effect July1, 2019, it will require that companies writing Homeowner’s insurance prepare a replacement cost estimate every other year. The new law ensures California homeowners are covered with current and up-to-date estimates that reflect the property’s most current value.
California’s recent wildfires showed that many survivors were underinsured, due to outdated or inaccurate replacement cost models insurers used.
Until the law takes effect, regulations require a complete and comprehensive estimate of the cost to replace a home when the policy is originally placed, but do not mandate that insurers produce or regularly update a replacement cost calculation on subsequent renewals.
According to the San Francisco Chronicle, the law will strengthen consumer protections and address critical issues facing survivors of wildfires.
The law will require insurers to either provide a policyholder with a full replacement cost estimate every other year or apply an inflation factor to the dwelling limit at each renewal and clearly offer the consumer the option to obtain a full replacement cost estimate.
If you have any questions about the new law, Van Beurden Insurance has the answers. To learn more, call or e-mail me.