By Oakview Insurance Services | Yuba City, CA | Home & Property Insurance
Governor Gavin Newsom signed a package of property and casualty insurance bills into law on September 30, 2026. The changes affect homeowners insurance, the California FAIR Plan, wildfire nonrenewal protections, smoke damage claims, auto glass coverage, and privacy practices for agents and brokers.
Most of the new laws take effect January 1, 2027. Several others become operative January 1, 2028. A handful were vetoed, and two consumer groups have publicly disputed the governor’s reasoning for those vetoes.
Here is a plain-language breakdown of what changed, what it means for policyholders in Yuba, Sutter, Colusa, and Butte Counties, and what questions are worth asking your agent before your next renewal.
What new California insurance laws take effect January 1, 2027?
Several laws take effect at the start of 2027, covering wildfire nonrenewal protections, FAIR Plan agent training, clearinghouse disclosure requirements, distressed area updates, auto glass consumer protections, and the new California Wildfire Resilience Loan Program.
Wildfire Nonrenewal Moratorium Extended to Two Years (AB 2038)
Under current law, an insurer cannot cancel or nonrenew a residential property insurance policy solely because the insured structure is located in an area where a wildfire occurred, but that protection only lasts one year after a declared state of emergency. AB 2038 extends that moratorium from one year to two years.
The law also extends the guaranteed renewal period after a disaster-related total loss. Previously, insurers were required to offer two annual renewal periods, with a minimum of 24 months of coverage from the date of the total loss. Under AB 2038, that extends to three annual renewal periods and a minimum of 36 months.
For homeowners in fire-prone areas of Butte, Yuba, and Colusa Counties, this is one of the most meaningful consumer protections in this legislative package. If your home is in or near a wildfire perimeter, your insurer now has less room to exit your policy in the years immediately following a fire event.
Distressed Area Designations Must Be Reviewed Annually (AB 2724)
AB 2724 requires the California Department of Insurance to review and update the areas that qualify as distressed areas under its catastrophe model regulations on an annual basis. Insurers who write policies under the state’s Sustainable Insurance Strategy are required to make commitments to write in distressed areas. Annual updates ensure those area designations reflect current conditions rather than becoming outdated over time.
Agent and Broker FAIR Plan Training Now Required (AB 69)
AB 69 directs the California FAIR Plan to require agents and brokers to complete a course called Brokers and FAIR Plan, which provides training on the broker’s responsibility to advise policyholders about voluntary market options alongside FAIR Plan coverage.
Starting January 1, 2028, the FAIR Plan will also be permitted to share policyholder information, including the agent or broker of record, with insurers participating in the Plan’s clearinghouse program. When that sharing occurs, any insurer making an offer must simultaneously notify both the policyholder and the agent or broker of record.
This is a significant structural change. It means that if you are a FAIR Plan policyholder and a private carrier identifies your property as one they are willing to write, your agent will be part of that conversation from the start rather than learning about it after the fact.
Agents Must Disclose FAIR Plan Clearinghouse Information (AB 2061)
AB 2061 requires any agent or broker who helps a client obtain FAIR Plan coverage to provide that client with information about the FAIR Plan’s clearinghouse programs. These programs are designed to help FAIR Plan policyholders transition to private market coverage when a carrier becomes willing to write their property.
The law also requires the FAIR Plan to post quarterly reports on its website showing the number of policies issued in each ZIP code and the risk exposure of the Plan. That data will be publicly available and will give agents, policyholders, and researchers a clearer picture of where the FAIR Plan is concentrated and how its exposure is evolving.
FAIR Plan Commissioner Authority Expanded (AB 1680)
AB 1680 authorizes the insurance commissioner to require the FAIR Plan to adjust policy limits available under its programs and to make additional coverage offerings available under the Plan’s renters property insurance program. The law also requires the FAIR Plan to take corrective actions when violations are identified in an examination report. Failure to do so carries a $20,000 penalty per violation.
Auto Glass Consumer Protections (SB 988)
SB 988, known as the California Motor Vehicle Glass Act, creates new consumer protections around auto glass repair and replacement. Insurers are now prohibited from making claim payments contingent on the use of a specific repair facility for glass work. Insurers may still recommend facilities and maintain a network of glass repair shops, but the payment cannot be tied to where the work is done.
California Wildfire Resilience Loan Program (SB 894)
SB 894 establishes a new state loan program to provide financial assistance to homeowners for wildfire risk reduction, including home hardening improvements and defensible space work. Details on how to access the program, eligibility, and loan terms will be developed through implementation, but the program is intended to help homeowners in higher-risk areas take the mitigation steps that can qualify them for private market coverage and insurance discounts.
For policyholders in Northern California who have been looking for financial help to make hardening improvements, this is worth tracking as the program rolls out.
Insurance Commissioner Examination Authority Strengthened (SB 1209)
SB 1209 gives the insurance commissioner the authority to compel an insurance company to correct violations identified in an examination report. Previously, the commissioner could identify violations but had more limited tools to force compliance. This change gives the regulator stronger enforcement authority over carriers operating in California.
What new California insurance laws take effect January 1, 2028?
Three significant sets of changes become operative in 2028: expanded homeowners insurance coverage requirements under SB 876, stronger nonrenewal notice protections under SB 1301, and new privacy practices for agents and brokers under SB 354.
Extended Additional Living Expense and Replacement Cost Coverage Required (SB 876)
SB 876 makes two important changes to what homeowners insurers must offer starting in 2028.
First, any homeowners insurance policy with a dollar limit for additional living expenses must offer the policyholder the option to purchase extended additional living expense coverage of at least 50% above the underlying policy limit. Additional living expense coverage pays for temporary housing and related costs when a covered loss makes a home uninhabitable. The current standard limits have proven inadequate for many wildfire survivors who face extended displacement.
Second, the law requires residential property insurers to offer extended replacement cost coverage of at least 50% above the policy’s primary dwelling limit. This addresses the well-documented problem of underinsurance, where homes are insured at values that no longer reflect actual rebuilding costs after years of construction cost inflation.
The law also requires insurers providing replacement cost coverage to give policyholders an estimate of what it would actually cost to rebuild or replace their structure under the Department of Insurance’s replacement value regulations.
Additionally, SB 876 increases the civil penalty for unfair competition or deceptive acts in insurance related to a state of emergency to up to $10,000 per act, or $20,000 if the act is willful. The insurance commissioner is also authorized to order restitution for losses arising from unfair settlement practices.
Nonrenewal Notice Period Extended and Dispute Rights Added (SB 1301)
SB 1301 changes several things about how insurers must handle policy nonrenewals for residential property coverage starting in 2028.
The required notice period before a nonrenewal increases from 75 days to 90 days. Insurers must provide a detailed, plain-language explanation of the reason for the nonrenewal. They must also provide the policyholder with all non-aerial imagery used as a basis for the decision and, upon request, any property inspection findings or reports that contributed to it.
The notice must include a plain-language explanation of the policyholder’s right to dispute any information the insurer relied on in making the nonrenewal decision.
If a nonrenewal is based on the property not meeting underwriting guidelines, the insurer must give the policyholder the opportunity to make the necessary property improvements to meet those guidelines before the nonrenewal takes effect.
The law also prohibits an insurer from refusing to issue or renew a policy solely because of roof age, if the policyholder obtains an independent inspection confirming at least five years of useful roof life remaining. This addresses a common nonrenewal trigger that has affected older homes throughout California, including many rural properties in the Sacramento Valley.
New Privacy Practices for Agents and Brokers (SB 354)
SB 354 amends the Insurance Information and Privacy Protection Act and reforms how licensed producers collect, share, and retain consumer personal information. The law requires licensees to provide consumers with an initial privacy notice and annual privacy notices. A producer is not required to provide these notices if the insurer with whom the producer places business already complies with the notice requirements.
SB 354’s obligations around sharing personal information, providing consumer access to information, and correcting information do not apply to a producer when specified conditions are met, including that the producer does not share personal information for purposes unrelated to obtaining insurance coverage. These provisions become operative July 1, 2028.
Smoke Damage Claims: New Standards Coming (AB 1642 and AB 1795)
AB 1642 requires the Department of Toxic Control and the California Air Resources Board to develop regulations and standards for detecting and removing hazardous contaminants after a wildfire. AB 1795 then ties residential property insurance claims for smoke damage directly to those standards.
Under AB 1795, if wildfire smoke, ash, soot, char, or combustion byproducts are present in a surviving residential property after a wildfire, there is a rebuttable presumption that the smoke damage is the result of the wildfire. The insurer is responsible for covering the cost of sampling and testing necessary to return the property to its pre-loss condition. And the insurer cannot terminate additional living expense coverage for a smoke damage claim until the property has been cleared for human occupancy under the standards developed by the state agencies.
The timing of AB 1795’s implementation depends on when AB 1642’s regulations are finalized, so specific effective dates will follow the regulatory process.
What was vetoed and why does it matter?
Governor Newsom vetoed SB 877 and SB 878. SB 877 would have clarified that policyholders have the right to obtain all claims-related documents, including valuation and loss adjustment calculations. SB 878 would have codified existing Department of Insurance regulations on claim payment timeframes into law and required interest payments when those timeframes were not met.
Two consumer advocacy organizations, Consumer Watchdog and Every Fire Survivor’s Network, publicly stated they believe the vetoes were retaliation for their opposition to a separate proposal by Governor Newsom that would have limited utility companies’ liability for wildfire damages. The governor’s office described the vetoes as reflecting that the bills were “unnecessary.” The bills did not advance.
What does all of this mean for homeowners in Yuba, Sutter, Colusa, and Butte Counties?
Taken together, this legislative package reflects an ongoing state effort to stabilize the California homeowners insurance market, strengthen consumer protections for wildfire-affected policyholders, and increase transparency around nonrenewals and claims handling. The changes happening in 2027 focus primarily on FAIR Plan accountability and wildfire nonrenewal protections. The larger structural changes to coverage requirements and nonrenewal procedures come in 2028.
For homeowners in Northern California who have been dealing with nonrenewals, limited coverage options, or FAIR Plan policies, several of these laws directly address the friction points that have made the last several years difficult. The roof age provision in SB 1301 alone will matter to a significant number of older rural homes in this region.
The extended replacement cost and additional living expense requirements in SB 876 are worth understanding now, even though they do not take effect until 2028. When those provisions become operative, policyholders will be offered coverage options they were not offered before. Knowing what those options mean and whether to take them is a conversation worth having with your agent ahead of time.
How can Oakview Insurance help me understand these changes?
At Oakview Insurance Services, we work with homeowners across Yuba, Sutter, Colusa, and Butte Counties on exactly these questions every day. We are licensed to write CA FAIR Plan policies and we work with over 100 carriers across California. As an independent broker, we represent you, not the carrier, which means when a law changes what insurers are required to offer, we help you understand what that means for your specific policy and whether you should act on it.
If you have received a nonrenewal notice, if you are on the FAIR Plan and want to understand your clearinghouse options, or if you simply want to review your coverage limits ahead of the 2028 changes, we are here to help.
Request a free home insurance review at oakviewins.com or call us at (530) 674-5054.