New California Insurance Laws on the Books in 2026

A new suite of California laws aimed at improving property insurance for the state’s people took effect Jan. 1.

Primarily, the legislation focuses on promoting wildfire safety and consumer protections, with steps that increase transparency or customer convenience.

Insurance is crucial because it gives our lives some stability in an inherently and increasingly unstable world. Climate change is accelerating natural disasters, making insurance more expensive and less available. The laws the state passed in 2025 attempted to increase oversight, protections and convenience for Californians.

Gov. Gavin Newsom noted that insurance companies are returning or expanding coverage in California in his final State of the State speech, but acknowledged that there is still “a lot of work to do here.”

His latest budget includes a financing program to help survivors of wildfires bridge the gap between insurance payouts and the costs of rebuilding. “This will help get survivors back in their homes much, much faster,” he said.

That may be the case, but many Californians are still saddled with high insurance premiums that threaten affordable housing across the state.

Here are the key insurance-focused measures:

*Eliminate “The List” Act (SB 495): Insurance companies have generally required wildfire survivors to submit a detailed list of everything in their house destroyed in a disaster in order to get reimbursed for those items. A new law, authored by state Sen. Ben Allen, D-Santa Monica, eliminated this requirement. Insurance companies must now pay 60% of contents coverage limits, capped at $350,000, when customers lose their home in a qualifying disaster. Customers who do have a detailed list of all their belongings and their value can get 100%.

This was one of the laws Dave Jones, former state Insurance Commissioner from 2011 to 2018, thinks will have the greatest impact for Californians. Creating “the list” following a catastrophic loss was emotionally taxing and logistically difficult for many people. As commissioner, he said, his office got insurance companies to voluntarily reimburse people for up to 50% of coverage limits for personal contents. He was glad to see this codified in law and raised to 60%.

*The California Wildfire Public Model Act (SB 429): Jones, who is now the director of the Climate Risk Initiative at UC Berkeley’s Center for Law, Energy and the Environment, was also glad to see a law passed that funds the nation’s first publicly available wildfire loss catastrophe model. More than a decade ago, the state of Florida built a catastrophe model for hurricanes and the state, insurers and residents have found it useful in understanding their risk from severe storms. California now allows insurance companies to use forward-looking “cat models,” which factor in risks due to climate change, and legislators felt a public model was needed as a transparent comparison point.

“Instead of just having to rely on the private proprietary models that the insurers have or that they license from private modeling vendors and then use and submit to the department for purposes of seeking approval of their rates,” Jones said, “there would be a publicly owned model.”

When insurance companies ask the Department of Insurance for a rate increase, the state can now compare estimates of the private and public models. Officials hope it will be useful for local and state planning and administrative agencies to get a grip on the potential catastrophic risks that California faces. It can also guide the state of California or local governments that want to guard against disasters.

State Sen. Dave Cortese, D-San José, authored the law.

*The California Safe Homes Grant Program (AB 888): Steps like installing fire-resistant roofs or changing landscaping around the home can do much to protect a home from fire, but the changes can come with a hefty price tag. This bill establishes a program to help cover homeowner and community costs. The amount in the fund hasn’t yet been communicated. Authored by state Assemblymember Lisa Calderon, D-Whitter.

*The Insurance and Wildfire Safety Act (AB 1): This bill requires California’s insurance regulators to regularly review and update their regulations designed to promote wildfire safety and encourage insurers to offer discounts for wildfire mitigation. Authored by Assemblymember Damon Connolly, D-San Rafael.

*The Business Insurance Protection Act (SB 547): This extends the protections homeowners receive after a fire, a one-year prohibition of non-renewals from insurance companies, to businesses, homeowners’ associations, condominiums, affordable housing units and nonprofits. Authored by state senators Sasha Renée Pérez, D-Alhambra, and Susan Rubio, D-West Covina.

*The FAIR Plan Stabilization Act (AB 226): This law permits the FAIR plan, the state’s insurer of last resort, to access bonds if it’s at risk of bankruptcy. Jointly authored by Assemblymembers Lisa Calderon, D-Whitter, and David Alvarez, D-Chula Vista.

*FAIR Plan oversight (AB 234): This act places two lawmakers, or someone they designate, on the FAIR Plan governing board in an attempt to increase transparency. This is one of the property insurance-related laws Karl Susman, insurance broker and owner of Susman Insurance Agency, said is overdue.

“We’ve never had an idea of what’s going on behind the scenes with the FAIR Plan,” he said.

The FAIR Plan has not publicly disclosed who is on the board and doesn’t have to explain their deliberations. The lawmakers on the board won’t have voting power, but they will be able to communicate with the public about what is happening. “I think that’s a really big one,” Susman said. “At least now when there’s a major problem we’re not going: ‘We don’t even know who to ask.’”

*FAIR Plan automatic payments (AB 290): This bill tries to prevent unintentional policy lapses in coverage from the FAIR Plan due to missed or delayed payments. It requires the FAIR plan to set up a system to accept automatic payments from policyholders. Authored by Assemblymember Rebecca Bauer-Kahan, D-San Ramon.

The FAIR Plan “has an online portal where you can make payments, but it’s notoriously bad,” Susman said.

This law may make payments more convenient for FAIR Plan policyholders, he said, even if it seems like an odd thing to have to legislate. “If I told you how much time gets wasted on their payment portal, you’d say, ‘Oh my God, that’s crazy.”

Bills that didn’t pass

A bill that did not pass last year, to Jones’ disappointment, sought damages from the oil and gas industry for its role in rising temperatures and extreme weather-related disasters.

It would have allowed individuals, small businesses, and even the FAIR Plan to bring lawsuits directly against the industry for damages associated with emissions-driven, climate catastrophes.

Last year, Colorado passed a bill (HB25-1182) that requires insurance companies to take into account home hardening, defensible space and landscape-scale forest management projects when they write or renew policies.

It would mean lower prices for customers who mitigate their fire risk. A similar bill failed in California in 2024, but Jones hopes the idea is revisited. “It’s embarrassing that California not only is not the first state in the nation to enact it, but has not enacted it at all,” he said.

Still, California’s recent changes to how insurance works, he believes, will keep the industry going in the near and mid-term. But in the long run, he said, these tweaks won’t cut it.

The increase of climate-driven disasters, Jones said, will overwhelm any of these regulatory changes.

“Unless we address the root cause, which are the emissions that are causing temperature rise, more severe and extreme weather-related events, killing more people, injuring more people, destroying more homes and businesses and then causing insurers to pay out more,” he said. “Unless we address the root causes, we’re going to continue to march towards an uninsurable future.”