California has the fourth-highest rate of insurance nonrenewals in the country. Many policyholders receive notices without clear explanations.
Two bills aimed at strengthening protections for insurance policyholders in California advanced out of committee this week, with supporters saying the measures would improve transparency and enforcement in a market plagued by widespread nonrenewals.
Sen. Ben Allen, D-Pacific Palisades, authored both measures. SB 1301 would require insurers to explain in nonrenewal notices why they are dropping coverage and give policyholders a chance to address identified risks to keep their policies. SB 1209 would set deadlines for insurers to fix problems uncovered during examinations by the Department of Insurance, with potential fines of up to $20,000 for noncompliance.
California has the fourth-highest rate of insurance nonrenewals in the country. Many policyholders receive notices without clear explanations, forcing families to scramble for new coverage or turn to the state-backed FAIR Plan, which has seen its exposure surge 230% since 2022.
“The dysfunction exposed in the insurance market over the past year requires our urgent attention in Sacramento,” Allen said. “Too many families are losing coverage without explanation, leaving them in the dark on how to proceed, and lax enforcement authority is failing to hold insurers accountable to the law. This needs to change.”
Under current law, insurers must notify policyholders when they decide not to renew coverage, but the notices often lack specific reasons. Allen said SB 1301 would provide more information so homeowners can understand the decision and take steps to reduce risk.
“Families need more information,” Allen said. “We can’t expect them to know why they’ve been deemed too risky without these details from their insurer. This transparency will empower more Californians to appropriately reduce their risk and improve insurability.”
The second bill, SB 1209, addresses enforcement gaps at the Department of Insurance. While examiners can identify compliance issues, insurers currently face no firm requirement or timeline to correct them. A 2025 review of the FAIR Plan found that fewer than half the recommendations from a 2022 examination had been implemented, contributing to problems including unfair claims denials and outdated underwriting guidelines.
SB 1209 would establish deadlines for insurers to resolve concerns raised in examinations before fines can be imposed.
