The California Department of Insurance just provided its 2023 Annual Notice of the most significant laws pertaining to residential property insurance policies. The notice starts with the following introduction, which warns insurers that they must provide the notice to claimants suffering from a declared state of emergency: 

The California Department of Insurance (CDI) is required to prepare and deliver to admitted insurers and licensed insurance adjusters an annual notice describing the most significant California laws pertaining to property insurance policies, including those related to a declared state of emergency (California Insurance Code [Cal. Ins. Code section 14046[a][1]). The 2023 annual notice is in a new format and is available in the “Education” section of CDI’s Insurance Adjuster Requirements web page. CDI may also issue interim updates if significant changes to the law occur during the course of this year. These updates will also be available on CDI’s website.

Since at least 2007, after major wildfire events, CDI has distributed notices to insurers, agents/brokers, and adjusters regarding significant California laws that pertain to residential property insurance policies. These notices focus on wildfire claims and can be found on CDI’s Wildfire Resources web page.

For claims under a policy of residential property insurance arising as a result of a declared state of emergency, every residential property insurance company is required to provide the claimant with a copy of this or the most recent notice no later than 15 calendar days from the date on which the insurer received notice of the claim. It is expected that all residential property insurers and insurance adjusters will comply with the following laws for residential property insurance claims related to a state of emergency….

California property insurance Codes and Regulations are generally more rigorous than other states and apply specifically to how adjusters evaluate property damage claims. The annual notice covers numerous items, including: 

  • Actual Cash Value Calculation
  • Replacement Cost Value Calculation 
  • Time Limit To Collect Full RCV Benefits 
  • Rebuilding In A New Location 
  • No Land Value Deduction For Replacement Building 
  • List of Covered Items For ALE
  • Time Limit on ALE To 36 Months 
  • Restricted Area ALE Mandatory 
  • Itemization of Contents—No Company Mandated Forms
  • Limits on Claim Adjusters Changing 
  • Appraisal—Not Mandatory After Disaster
  • Free Copy of Policy Within 30 Days
  • Combine Limits For Coverage A & B
  • 30 Percent Payment of Total Loss Contents With No Inventory 

These Codes and Regulations prevent a lot of adjustment gamesmanship that happens in other states. My prediction is that many states will begin to pass similar laws as insurers increasingly treat their own customers like third-party claimants with sharp cost cutting adjustment practices. 

If you are not from California, please take a minute to read the notice and think about how it would change property adjustment in your state. 

Thought For The Afternoon 

When the Oakies left Oklahoma and moved to California, it raised the I.Q. of both states.

—Will Rogers