California announced September 28 that Governor Gavin Newsom signed SB 876, the Disaster Recovery Reform Act, addressing insurance claims after declared disasters. The Department of Insurance says the law takes effect January 1, 2027. Newly signed protections should not be described as already applicable to every claim today.
The department says the law requires insurer disaster-recovery plans, doubles penalties during declared emergencies for specified claims violations and requires direct restitution for unfair settlement practices. It also requires a status report within 15 days when a new adjuster is assigned.
Other provisions include mandatory offers of extended replacement-cost and additional-living-expense coverage when a policy is written, regularly updated replacement-cost estimates, and building-code upgrade coverage tied to rebuilding rather than the time of loss. An offer requirement is not the same as every policy already containing unlimited coverage.
Homeowners and renters should preserve adjuster changes, claim estimates and written coverage decisions and ask which protections govern their policy and loss. The department's report of additional payments recovered through earlier complaint reviews is separate from benefits under the new law. Neither figure establishes an individual entitlement or a reason to ignore existing proof-of-loss requirements.