Homeowners Bill of Rights moves through Legislature


The bill package is supported by state Insurance Commissioner John Garamendi. Its supporters say it would protect people from being victimized by the insurance process.

By Steven Genson/Special to The Malibu Times

A state bill package called the Homeowners Bill of Rights, or HOBOR, has reached the halfway point toward legislative approval. HOBOR, which includes two Assembly bills and two Senate bills, is championed by state Insurance Commissioner John Garamendi, and its supporters say it would prevent disaster survivors from being victimized by the insurance process. The Assembly and Senate bills were approved in their respective houses late last month, and the bills will now go before the insurance committees of the opposite legislative body prior to a vote on the floor.

HOBOR’s Senate Bill 1474, would require insurance companies to issue and renew homeowners’ policies unless the consumer made two or more claims within the preceding three-year period. Also, no surcharge on a homeowner’s premium could be levied unless there were two or more claims in three years. SB 1855 would require insurance companies to disclose to homeowners the additional cost of broader insurance coverage than the homeowner’s current coverage. Assembly Bill 2199 would establish a minimum 12-month period in non-catastrophic situations and a 24-month period for declared state of emergency situations for homeowners to repair, rebuild, or replace their homes after a loss. Also, it would allow homeowners the flexibility to rebuild or replace in a different location if the home were totally destroyed. Lastly, AB 2962, which is sponsored by Assemblymember Fran Pavley, would set a uniform measurement to calculate the actual cash value of property.

Following last year’s fires in San Diego and San Bernardino, hundreds of victims were outraged to discover they were underinsured and financially unable to replace all their losses. Part of the problem was people not fully understanding what was included in their policies. Garamendi conducted several meetings in those areas to hear the concerns. He said HOBOR would address many of the concerns for future disaster victims.

Malibuites are reminded of the aftermath of the 1993 firestorm, in which residents found themselves in a similar situation to those in San Diego and San Bernadino. Arnold York, publisher of The Malibu Times, lost his home in the fire, and helped to form action groups to establish better communication among victims.

“[It]made it easier to discover when an agent was lying to or stonewalling a particular policyholder,” York said.

Much of HOBOR has been opposed by the Personal Insurance Federation of California, the major lobbying group for California insurance companies. Jerry Davies, director of communications at PIFC, said SB 1474 could lead to consumer abuse. Diane Colborn, vice president of legislative and regulatory affairs for PIFC, said HOBOR would have some unintended negative effects. She said that AB 2962 would lead to fewer policy options and SB 1855 could be confusing to consumers who are given information they did not request.

The bills are scheduled to go before the legislative insurance committees on Wednesday.