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AB-1923 Residential property insurance: wildfires: consolidated debris removal.(2017-2018)

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Date Published: 04/20/2018 04:00 AM
AB1923:v98#DOCUMENT

Amended  IN  Assembly  April 19, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 1923


Introduced by Assembly Member Limón

January 24, 2018


An act to add Section 10103.8 to the Insurance Code, relating to insurance.


LEGISLATIVE COUNSEL'S DIGEST


AB 1923, as amended, Limón. Residential property insurance: wildfires: consolidated debris removal.
Existing federal law directs the federal government to provide various forms of assistance to state and local governments that have jurisdiction over a designated area that has been declared a major disaster area, as specified, including the removal of debris from the affected area. Existing federal law generally prohibits providing direct assistance to an individual or private organization for the cost of removing debris from their own property, except as specified.
Existing law, the California Emergency Services Act, confers upon the Governor and upon the chief executives and governing bodies of political subdivisions of this state specified emergency powers and provides for state assistance in the organization and maintenance of the emergency programs of those political subdivisions. A “state of emergency,” for purposes of the act, includes the duly proclaimed existence of conditions of disaster caused by various conditions, including fire, which, by reason of their magnitude, are or are likely to be beyond the control of the services, personnel, equipment, and facilities of any single county, city and county, or city and require the combined forces of a mutual aid region or regions to combat.
Existing law generally governs the business of insurance in the state, including, among other things, residential real property insurance disclosures.
This bill would authorize, in the event of loss relating to a “state of emergency,” as defined, due to a wildfire, the Governor, or his or her designee, to implement require an insurer for a residential property insurance policy, if a consolidated debris removal program program, in which a residential property owner who has insurance in effect at the time of a wildfire that provides coverage for debris removal voluntarily assigns any rights, benefits, and proceeds for that coverage to a county or designated agency and makes any benefits and proceeds directly payable to that county or designated agency. The program would provide that the owner agency, is implemented following a state of emergency, to provide the assignee with relevant policy and claim information and to issue payment directly to the assignee, as specified. The bill would provide that a residential property owner who makes an assignment by executing a right of entry form is not liable for any additional costs of the debris removal in the designated area in which the debris removal program is implemented. The bill would provide that, if coverage for debris removal is not separately specified by the policy, but is included within another coverage category, the payment to the county or designated agency would be limited to the amount of the unused benefit, if any, in the other coverage category after the residence is rebuilt or replaced. The bill would also provide that these provisions do not require an insurer to pay more than a reasonable amount for debris removal services based upon the type and quality of services provided by the consolidated debris removal program, and that the program’s provisions are severable.

The bill would apply these provisions retroactively to any applicable claim filed on or after July 1, 2017.

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 10103.8 is added to the Insurance Code, to read:
10103.8.

(a)In the event of loss relating to a “state of emergency,” as defined in Section 8558 of the Government Code, due to a wildfire, a consolidated debris removal program may be implemented pursuant to this section at the direction of the Governor, or his or her designee, in order to protect the health, safety, or natural resources of the community. If a consolidated debris removal program is implemented, the insurers for all residential property insurance policies issued in the county or other area defined in the state of emergency shall participate in the program, except as provided in subdivision (b).

(b)An insurer shall obtain the consent of the residential property owner prior to making the residential property insurance policy providing coverage for that property subject to this section. If

10103.8.
 (a) For purposes of this section, the following definitions apply:
(1) An “assignee” is the county or designated agency overseeing the consolidated debris removal program in which the policyholder’s property is located.
(2) A “consolidated debris removal program” is a program in which a residential property owner, who has insurance in effect at the time of a wildfire that provides coverage for debris removal, voluntarily assigns any rights, benefits, and proceeds for that coverage to a county or designated agency and makes any benefits and proceeds directly payable to that county or designated agency.
(3) A “right of entry form” is a form used by the county or designated agency to obtain the permission of the property owner to undertake consolidated debris removal services on the property owner’s property and that includes a provision whereby the property owner may make an assignment of insurance benefits payable.
(b) If a consolidated debris removal program is implemented following a “state of emergency,” as defined in Section 8558 of the Government Code, and the insurer for residential property receives a signed copy of the policyholder’s right of entry form, the insurer shall, upon request of the policyholder or the policyholder’s assignee:
(1) Provide the assignee with relevant policy and claim information.
(2) Issue payment directly to the assignee for any covered debris removal costs payable, but not yet paid, to the policyholder, to the extent that either of the following applies:
(A) There are remaining benefits under any policy provision exclusively dedicated to debris removal costs.
(B) There are remaining benefits under any other policy provision that covers debris removal costs, without specific allocation, together with other categories of loss, and the policyholder has completed the process of rebuilding the damaged dwelling or has otherwise settled the claim for benefits under that policy provision.
(c) If a residential property owner does not elect to participate in the program, the insurance policy providing coverage for that property is not subject to this section.

(c)

For purposes of this section, a “consolidated debris removal program” is a program in which a residential property owner who has insurance in effect at the time of a wildfire, that provides coverage for debris removal, voluntarily assigns any rights, benefits, and proceeds for that coverage, up to the full amount of the coverage, to a county or designated agency and makes any benefits and proceeds directly payable to that county or designated agency. A

(d) A residential property owner who makes that an assignment of insurance benefits by executing a right of entry form is not liable for any additional costs of the debris removal in the designated area in which the debris removal program is implemented. If
(e) If the residential property owner’s insurance coverage for debris removal is not separately specified by the policy, but is included within another coverage category, the payment to the county or designated agency is limited to the cost of debris removal at the insured property, but shall not exceed the amount of the unused benefit, if any, in the other coverage category after the residence is rebuilt or replaced, and the property owner is not liable to the county or the designated agency for costs other than the amount of the unused benefit. replaced.
(f) An invoice submitted by a county or designated agency to an insurance company pursuant to this section shall include an itemization of all charges, including the claim number or policy number and the property address. A county or designated agency shall include in the invoice only those charges or fees that are directly incurred while performing debris removal services for the specific property covered by the insurance policy. The county or designated agency shall submit the invoice no later than six months after the debris removal services are completed.

(d)

(g) This section does not require an insurer to pay more than a reasonable amount for debris removal services based upon the type and quality of services provided by the consolidated debris removal program. program at the insured property.
(h) An insurance company does not incur any obligation or liability to any person or entity from actions taken to comply with the requirements of this section.

(e)

(i) The provisions of this section are severable. If any provision of this section or its application is held invalid, that invalidity does not affect other provisions or applications that can be given effect without the invalid provision or application.

(f)This section shall be applied retroactively to any applicable claim filed on or after July 1, 2017.