California Bill Seeks to Fast-Track Wildfire Insurance Claims and Expand Policyholder Protections

California is pushing forward with legislation aimed at overhauling how insurers handle claims after catastrophic wildfires, signaling a major shift in post-disaster regulation. Senate Bill 876, backed by the California Department of Insurance and introduced by Sen. Steve Padilla, proposes sweeping reforms that could directly impact how claims adjusters and insurers operate following wildfire events.

The bill would double additional living expense (ALE) coverage after an emergency declaration and require upfront payments on total loss claims, ensuring faster financial relief for policyholders. It also sets mandatory timelines, including a 30-day deadline for actual cash value payments and a 15-day reporting window for losses after a disaster. These provisions would significantly alter adjuster workflows, with more pressure to meet accelerated deadlines and increased scrutiny from regulators.

For claims professionals, the proposed disaster recovery plans and biannual updates mean more rigorous documentation and strategic planning. Adjusters will also face new compliance requirements under stricter fair claims handling rules, alongside potential penalties for violations. As California wildfire losses climb past $22 billion, the legislation reflects mounting urgency to streamline recovery efforts and restore public trust in the insurance system.

This legislation, if passed, would increase operational demands on insurers and third-party administrators while raising the stakes for meeting compliance standards during catastrophe response. Claims teams must prepare for faster claim cycles, increased documentation duties, and heightened regulatory oversight across California.