| Insurers
will be required to disclose to consumers why their homeowners'
insurance policy was not renewed and insurance companies will
be barred from penalizing customers who inquire about coverage
without filing claims. In addition to compelling insurers to
explain cancellations to consumers, insurance regulation AB
1191, forces insurers to provide a written explanation for premium
increases, upon a consumer's request.
The inquiries-related
bill is AB 1049. Consumers have seen a dramatic change in the
practices of insurance companies in recent years, a change that
has been most pronounced in homeowners insurance. Specifically,
policyholders have been aggressively penalized by insurers for
filing claims and even for simply asking about the terms of
their coverage. Some companies have been non-renewing longtime
customers as a result of a couple of claims and/or inquiries
over a period of a few years.
Insurers
have also been denying new policies to homeowners who have
previously made inquiries based on information that the companies
purchase from the Comprehensive Loss Underwriting Exchange,
or CLUE, a centralized database housing massive information
about most American consumers' insurance claims and inquiry
history.
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California insurance regulations AB 1049 makes it
illegal to refuse to offer a policy to a customer or charge
them a higher rate simply because the CLUE database includes
information about past inquiries. The two insurance regulations
bills were part of a larger effort to reform the practices
of homeowner's insurance companies, which have been aggressively
raising consumers' premiums and canceling policies in the
past two years. Consumer advocates note that the bills signed,
while important, were only a portion of broader reforms that
are needed.
The state Assembly Insurance Committee killed two other reforms
that consumer groups and Insurance had identified as essential
to addressing policyholder's problems. Those insurance regulations,
SB 691 and SB 64, would have barred insurers from using customers'
credit scores in setting homeowner's insurance rates and added
new California insurance regulations protecting homeowners
from unfair underwriting practices by insurers, respectively.
Additionally, insurers have gone to court to block Department
of Insurance efforts to regulate homeowner's insurance.
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| Car insurance protects you against the financial risk associated with personal injuries and property damage caused by auto accidents or theft. Like all states that have mandated the purchase of at least a minimum amount of liability coverage, the state of California is no exception. |
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