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CA Department of Insurance

Appellate Court Summarily Dismisses Insurance Companies' Challenge to Homeowner Protection Regulation

News: 2012 Press Release

For Release: May 3, 2012
Media Calls Only: 916-492-3566
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Appellate Court Summarily Dismisses Insurance Companies' Challenge to Homeowner Protection Regulation

Insurance Commissioner Dave Jones today announced that the California Court of Appeal summarily dismissed a legal challenge by the Association of California Insurance Companies (ACIC) and the Personal Insurance Federation of California (PIFC) to homeowner protection regulations adopted by the California Department of Insurance (CDI) last summer. The case now returns to Superior Court for final resolution.

"Protecting consumers has been a hallmark of my time as Insurance Commissioner. I'm pleased the Court of Appeal summarily rejected two insurance company trade associations' interim challenge to the Department's homeowners replacement cost regulations," said Commissioner Jones. "These regulations are an important protection for homeowners and address the widespread problem of underinsurance. They reduce confusion at the point of sale by requiring insurers that offer replacement cost estimates to provide complete information."

The Court of Appeal summarily dismissed ACIC and PIFC's petition for review of the trial court's dismissal of their motion for judgment on the pleadings. The matter now goes back to the trial court for final resolution. Trial is set for January 2013.

The Department issued the new homeowner protection regulations to address the problem of underinsurance that many homeowners face, particularly after large-scale disasters such as wildfires. In the past, many customers were confused about what a "replacement cost" estimate actually covers. This regulation is designed to clear up that confusion. Insurance companies are not required to provide an estimate, but if they do, it must be complete and include all components required to replace the damaged or destroyed home. The regulation prevents customers from being misled about the coverage they are buying.

The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $310 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $469 million in claims and premiums. Please visit the Department of Insurance website at Non-media inquiries should be directed to the Consumer Hotline at 800.927.4357. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.

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