California State Senator Ben Allen proposes groundbreaking legislation to revolutionize fire insurance claims, but the insurance industry’s response remains divided.
At a Glance
- The “Eliminate ‘The List’ Act” would require insurers to pay 100% coverage for belongings without itemization
- California could become the only state with such a requirement, surpassing Oregon and Colorado
- Insurance Commissioner Ricardo Lara supports the bill as part of a broader legislative package
- Insurance companies have varied responses to the proposed changes
- The bill aims to reduce stress for fire victims during the claims process
Groundbreaking Legislation Proposed
California State Senator Ben Allen has introduced a bill that could fundamentally change how insurance claims are handled for fire victims. The “Eliminate ‘The List’ Act” proposes that insurance companies cover 100% of losses to personal property in fires without requiring policyholders to provide detailed inventories of their possessions.
“Californians who have lost all they call home should not be subject to the pain compounded by insufficient coverage or missed deadlines. Additionally, the Eliminate ‘The List’ Act modernizes our data collection protocols to provide us with better climate insight that will guide us to a more insurable future,” State Senator Allen said.
If enacted, the legislation would make California the only state with such a comprehensive requirement. Similar proposals in Oregon and Colorado suggested 70% and 65% payouts without inventory, respectively. The bill is part of a broader legislative package focusing on wildfire mitigation, recovery, consumer protection, and maximizing insurance payouts.
The insurance industry’s response to the proposed changes has been mixed – and understandably so. This will change how the economics of insurance works.
California Insurance Commissioner Ricardo Lara has requested companies to voluntarily offer 100% coverage without itemization by February 28. However, a survey revealed varied responses from insurance companies regarding their itemization policies.
Some companies have already adapted their policies, too. AAA allows bulk itemization for insurance claims, while Pacific Specialty offers 100% payout without itemization. USAA provides 75% payout before requiring full itemization. However, other major insurers like Farmers, Mercury, SageSure, and State Farm still require full itemization after partial payouts.
The “Eliminate ‘The List’ Act” represents a significant step towards easing the burden on fire victims during the claims process. But first it needs to pass – and we’re likely to hear from politicians about how it could cause more harm than good. We’ll see!
