New laws sponsored by Commissioner Lara to strengthen consumer protections and wildfire resilience take effect January 1

News: 2025 Press Release

Sacramento, Calif. - Beginning January 1, 2026, nine new laws sponsored by Insurance Commissioner Ricardo Lara and the California Department of Insurance will go into effect, delivering stronger consumer protections for all Californians.

These new laws establish a wildfire safety grant program, expand insurance discounts, speed up claim payouts for wildfire survivors, extend non-renewal protections to businesses, strengthen the financial stability of the FAIR Plan, and modernize outdated insurance laws to improve transparency and accountability.

“The recent wildfires in Southern California exposed deep weaknesses in a 30-year-old framework of insurance regulation and enforcement. These new laws are part of a broader solution to put consumers in command by giving them more options, more transparency, and faster recoveries on their own terms,” said Commissioner Lara. “Protecting consumers is my top priority. I am grateful for the continued partnerships with the Governor and state legislators who helped champion these important measures.”

A lawmaker by training – having served in both the State Assembly and State Senate –Commissioner Lara brings a deep understanding of how laws, policies, data, and practices intersect. He has consistently applied this perspective to modernize insurance oversight and strengthen consumer protections statewide since his first day as Insurance Commissioner.

The following laws will go into effect on January 1, 2026 (unless otherwise noted):

Wildfire Safety

• The California Safe Homes Act (AB 888), authored by Assembly Member Lisa Calderon, protects homes and access to insurance by establishing a new grant program within the Department of Insurance to assist qualifying residents in obtaining new or replacement fire-safe roofs and implementing fire-safe mitigation measures within five feet of their homes—known as “Zone Zero.” This program will cover part or all the costs and will be included in community-wide safety initiatives. These mitigation measures are among the most impactful yet costly, and homeowners have consistently communicated their desire to undertake this work but lack the financial means. The California Safe Homes Act will help provide financial assistance for these essential projects.

• The California Wildfire Public Model Act (SB 429), authored by Senator Dave Cortese, enhances community safety and education by allowing the Department of Insurance to issue grants for establishing the nation’s first publicly available wildfire loss catastrophe model. The public model will facilitate assessments of wildfire risk, educate the public, and ensure greater transparency so communities and homeowners can plan effectively. This new law builds on recommendations from the Cal Poly Humboldt-led Public Wildfire Model Strategy Group.

• The Insurance and Wildfire Safety Act (AB 1), authored by Assembly Member Damon Connolly, enhances insurance discounts by requiring the Department of Insurance to regularly review its groundbreaking Safer from Wildfires regulations, ensuring this law reflects advancements in science, safety, and mitigation. This regular review will ensure that these regulations meet the needs of consumers and the industry, providing maximum benefits to homeowners and essential support to communities most vulnerable to wildfires.

Consumer Protection

• Eliminate “The List” Act (SB 495), authored by Senator Ben Allen, requires insurance companies to pay 60 percent of contents coverage limits, capped at $350,000, to wildfire survivors who experience a total loss without needing to submit a detailed inventory list. It also grants consumers at least 100 days to provide proof of loss to their insurance company following a declared state of emergency. Furthermore, the new law will establish specific data collection authority to help the Department of Insurance understand long-term trends in risk management and the integration of information related to climate-driven risks that significantly impact insurance availability.

• The Business Insurance Protection Act (SB 547), jointly authored by Senators Sasha Renée Pérez and Susan Rubio, builds on the Wildfire Safety and Recovery Act of 2018 (SB 824, authored by then-Senator Lara), which has protected millions of homeowners by prohibiting non-renewals of residential property insurance for one year. This new law extends this existing protection by broadening the insurance moratorium to now include commercial policies, covering businesses, homeowners’ associations (HOAs), condominiums, affordable housing units, and non-profits, among other covered entities.

• The FAIR Plan Stability Act (AB 226), jointly authored by Assembly Members Lisa Calderon and David Alvarez, enhances consumer safeguards by allowing the FAIR Plan, if authorized by the Insurance Commissioner, to access catastrophic bonds through the California Infrastructure and Economic Development Bank and enter into a line of credit or loan agreements with one or more lenders. This new law provides additional financial support for the state’s insurer of last resort, ensuring timely payment of consumer claims in the event of a major disaster.

• Annual Insurance Omnibus (AB 487), authored by the Assembly Insurance Committee, clarifies existing law, removes outdated code sections, and establishes new laws developed in collaboration with the Department of Insurance and stakeholders. It benefits the Department and Californians by improving clarity, efficiency, and fairness in regulation.

Health Care

• Increasing Consumer Protections in Student Health Insurance (AB 594), authored by Assembly Member José Luis Solache, allows students who are no longer enrolled at a university to withdraw from their health insurance coverage and cease paying premiums, makes changes regarding notices that must be given to schools and students when an insurer wants to increase its rates, and institutes a penalty if insurers fail to timely file their rate changes with the Department of Insurance. This new law will go into effect on July 1, 2026.

• Infertility Treatment Health Care Coverage (SB 729), authored by Senator Caroline Menjivar, requires insurance coverage for fertility and infertility care under disability insurance policies and large group health plans. This protects Californians’ access to in-vitro fertilization (IVF), and updates the definition of infertility to be inclusive of LGBTQ+ family planning experiences, despite any federal action to limit this coverage. This law applies to large and small group health care service plan contracts and disability insurance policies issued, amended, or renewed on or after the bill’s implementation dates. As signed by the Governor in 2024, SB 729 was to take effect on July 1, 2025, but an enacted California State Budget trailer bill delayed implementation to January 1, 2026. For CalPERS, the mandate begins on July 1, 2027.

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