After insurance pullback, advocates demand a ‘bill of rights’ for California policyholders
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- Consumer advocacy group Consumer Watchdog filed a ballot initiative requiring insurers to cover homeowners who fireproof homes, or face five-year sales bans.
- The measure responds to a competing initiative that would repeal core consumer protections from 1988’s Proposition 103 insurance reform law.
- Both proposed ballot measures come amid widespread anger over insurer pullbacks and rate increases, as well as how insurers have handled claims following the L.A. fires.
A leading consumer group is proposing a policyholder rights initiative that would require insurers to offer coverage to California homeowners who fireproof their homes — or lose the right to sell home or auto insurance in the state for five years.
The Insurance Policyholder Bill of Rights was filed with state Atty. Gen. Rob Bonta’s office last week by Consumer Watchdog, the Los Angeles advocacy group whose founder Harvey Rosenfield authored Proposition 103, the 1988 initiative that governs California home and auto insurance law.
The initiative for the November 2026 ballot also would give policyholders not renewed by their insurer 180 days to make home repairs and improvements necessary for renewal if they face unavoidable permit, construction and other delays.
“The Insurance Policyholder Bill of Rights guarantees that people who invest in wildfire mitigation get coverage and prevents companies from canceling people simply because they file a claim,” Rosenfield said in a statement.
Two Los Angeles County Superior Court lawsuits accuse dozens of California home insurers of dropping policyholders and forcing them onto the FAIR Plan — the state’s insurer of last resort — where polices cover less and cost more.
Insurers can seek six-month waivers of the rule in certain geographic areas but would need to show they have an overconcentration of risk there.
The proposed initiative comes after insurers began pulling back from the California market a few years ago after a spate of wildfires and began seeking double-digit rate increases. However, it is unclear whether the group will even start gathering the 500,000-plus signatures it would need to make the ballot.
Carmen Balber, executive director of Consumer Watchdog, said the measure was prompted by a separate initiative filed by a Roseville, Calif., insurance broker that would repeal core reforms of Proposition 103, which established an elected insurance commissioner with the right to review requests for rate hikes before they take effect.
The proposed initiative — called the California Insurance Market Reform and Consumer Protection Act of 2026 — was filed by Elizabeth Hammack, owner of Panorama Insurance Associates. It would allow insurer rate increases to take effect prior to any rate review, though they could be suspended later if the insurance commissioner determines the market is not “reasonably competitive.”
Additionally, insurers would have to provide premium credits to policyholders who take steps to reduce fire dangers on their property, under the measure.
State regulators have taken legal action against California’s home insurer of last resort over its alleged denial and limiting of smoke damage claims stemming from the Jan. 7 and prior fires — a move critics say is overdue and may not amount to much.
The measure also would abolish another core element of Proposition 103, by banning payments to “intervenors” such as Consumer Watchdog, which insert themselves in the rate-review process and seek to block or reduce increases — a provision that has irked the industry since its inception.
Hammack did not immediately respond Monday to requests for comment.
In an earlier email exchange with The Times, she said: “I drafted up the initiative and filed it out of pure frustration about the horrible California insurance market dysfunction and the feeling of just needing to do something, anything, to make a difference.”
Six months after the Jan. 7 fire storms that killed at least 30 people, frustrations are mounting among many homeowners over how the state’s largest insurer is handling their damage claims.
Balber said it requires $5.5 million to gather the required signatures for an initiative. While the group is confident it could raise the funds, she said it would not proceed with its own measure unless Hammack raises money and moves forward beyond the filing stage — or if Consumer Watchdog is swamped by donations.
“There are hundreds, if not thousands of Californians who are fed up with the insurance industry and after the Los Angeles fires, I can guarantee you that there are people out there who would be begging to fund a ballot measure that would finally hold the insurance industry accountable,” she said.
Proposed ballot initiatives in California must be reviewed by the attorney general, who prepares a title and brief summary. After that, proponents have 180 days to gather signatures.
The proposed dueling ballot measures come at a time when there is widespread anger not only over rate increases, but how some insurers have handled claims stemming from the Jan. 7 Los Angeles-area fires, which destroyed thousands of homes and killed at least 19 people.
As insurers withdrew from the L.A. market, more homeowners joined the FAIR Plan. Now Jan. 7 fire victims are battling with the state’s insurer of last resort to get compensated.
The Eaton Fire Survivors Network in Altadena and local politicians have demanded that Insurance Commissioner Ricardo Lara halt anymore rate increases for State Farm General, California’s largest home insurer, unless complaints over its claims handling are resolved.
In addition to State Farm, the state’s insurer of last resort, the California FAIR Plan, has come under attack for denying smoke-damage claims. That prompted Gov. Newsom to send a letter this month calling on the plan to handle the claims “expeditiously and fairly.”
The plan has taken on hundreds of thousands of policyholders in recent years as insurers began pulling out of the state’s fire-plagued homeowners market. Hammack’s initiative seeks to have the plan establish a schedule to shrink its roles when more coverage from carriers becomes available.
Her measure also would require the California insurance commissioners to have at least five years of insurance experience, either with a regulator, insurer or in other roles, such as actuarial science.
Times staff writer Paige St. John contributed to this report.
