Governor Vetoes Insurance Reforms for Wildfire Victims

California Governor Gavin Newsom has vetoed two legislative bills, SB 877 and SB 878, intended to improve the insurance claims process for wildfire survivors. Both bills had garnered bipartisan support and aimed to bring greater transparency and timeliness to how insurance companies handle claims for policyholders.

SB 877 would have mandated that insurers provide policyholders with original loss estimates and any subsequent revisions, a measure designed to combat underpayments by making changes visible. SB 878 sought to impose consequences for delayed claims, requiring insurers to provide written decisions faster and pay interest on overdue payments. Both proposals passed their respective legislative chambers with substantial majorities.

Consumer Watchdog, an advocacy group, characterized the veto as retaliation against wildfire victims and their allies who had opposed a recent initiative by the governor to reduce utility liability for fires they cause. The organization stated that the bills were critical for survivors seeking to rebuild their homes and avoid financial devastation.

The governor's office cited Insurance Commissioner Ricardo Lara's "Sustainable Insurance Strategy" as a reason for the veto, claiming the bills were unnecessary. However, Consumer Watchdog disputes this, arguing that Lara's strategy has failed to improve insurance availability and has instead led to significant rate increases without a corresponding rise in new policies.