Senate Bill (SB) 240 authored by Senator Bill Dodd is an urgency bill signed by Governor Gavin Newsom on October 3, 2019 and effective immediately.

SB 240 adds a new California Insurance Code (Cal. Ins. Code) Section 14046(a)(1), which codifies the practice of the California Department of Insurance (CDI) of preparing a notice describing the most significant California laws pertaining to property insurance policies, including those related to a declared state of emergency, as defined in Section 8558 of the Government Code, or other emergency declared by a public official.

Going forward, CDI intends to issue this notice in January of each year. However, given the recent and current wildfires that resulted in declared states of emergency across the state, CDI is issuing this year’s notice now. CDI may issue interim updates if significant legal changes occur during a particular year. This year’s notice is attached.

Newly added Cal. Ins. Code section 14046 (b) require insurers to provide claimants a copy of CDI’s annual notice:

“(b) For a claim under a policy of residential property insurance arising as a result of a declared state of emergency, as defined in Section 8558 of the Government Code, or other emergency declared by a public official, an insurer shall provide the claimant with a copy of the most recent notice described in paragraph (1) of subdivision (a) no later than 15 calendar days from the date on which the insurer received notice of the claim.”

Newly added section 14046 (c) requires supervising licensed adjusters to require its registered nonlicensed adjusters to read and understand CDI’s most recent annual notice and the most recent adjusting handbook promulgated by CDI within specified timeframes:

“(c) After a declared state of emergency, as defined in Section 8558 of the Government Code, or other emergency declared by a public official, a supervising licensed adjuster shall require any nonlicensed adjuster it has registered with the department pursuant to subdivision (b) of Section 14022.5 and any nonlicensed adjuster exempted from this chapter pursuant to subdivision (a) of Section 14022 to read and understand the most recent notice described in paragraph (1) of subdivision (a) and the most recent handbook described in paragraph (2) of subdivision (a) no later than 15 calendar days from the date on which the nonlicensed adjuster began claims adjusting activity in California.”

Since the October 3, 2019 effective date of SB 240, the Governor issued two emergency declarations for the fires listed below.

A State of Emergency was declared on October 11, 2019 in Riverside and Los Angeles Counties due to the following fires:

  • Saddleridge
  • Eagle
  • Sandalwood
  • Reche
  • Wolf

 

A State of Emergency was declared on October 25, 2019 in Sonoma and Los Angeles Counties due to the following fires:

  • Kincade
  • Tick

In addition, a State of Emergency was declared on October 27, 2019 across the state due to the effects of unprecedented high-wind events which have resulted in additional fires and evacuations.

Therefore, it is expected that all residential property insurers and insurance adjusters comply with these new laws for any residential property insurance claims arising from these fires and any subsequent claims arising from future states of emergency.

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