California’s biggest insurance changes from mid-September to October 9, 2026 came from new laws: Governor Newsom signed SB 876, the Disaster Recovery Reform Act, AB 1795 on wildfire smoke damage, and bills extending post-wildfire renewal protections and tightening FAIR Plan oversight, most taking effect January 1, 2027 or later, while the Insurance Commissioner proposed ending marital status as an auto rating factor.
Each item below gives the date, a one-sentence summary, what it means in practice and a link to the primary source: the California Department of Insurance, the Legislature’s bill text, the Governor’s office or the Workers’ Compensation Insurance Rating Bureau. Nothing here predicts what any policy will cost.
By Sam Alishahi, independent insurance broker · Published October 9, 2026 · Covers September 15 to October 9, 2026, plus changes taking effect by early January 2027
Sustainable Insurance Strategy snapshot: 12 home insurance groups expanding
The Department of Insurance’s market snapshot, updated October 7, 2026, counts 12 homeowners insurance groups expanding in California under the Sustainable Insurance Strategy, compared with none in 2025.
What it means: The same snapshot lists 27 homeowners rate filings approved in 2026 and 8 under review, an average of 282 days to approve a filing, 662 ZIP Codes in distressed areas, and 696,562 FAIR Plan homeowner and commercial policies in June 2026. If your home is on the FAIR Plan, that is a reason to ask for a fresh market check at renewal rather than assume the FAIR Plan is the only option.
AB 2038 lengthens renewal protections after wildfires and total losses
Governor Newsom signed AB 2038 (Chapter 917, Statutes of 2026), which extends two existing renewal protections for residential property policies after disasters.
What it means: After a disaster causes a total loss of the home, the insurer must offer to renew for at least the next three annual renewal periods, and no less than 36 months from the loss (up from two periods and 24 months), subject to the conditions in the law. Insurers may not cancel or nonrenew a policy in a ZIP Code within or next to a fire perimeter, solely because a wildfire occurred in the area, for two years after the emergency declaration (up from one year). The bill sets no later start date, so as a regular statute it takes effect January 1, 2027.
AB 2061: FAIR Plan must post policy counts by ZIP Code each quarter
Governor Newsom signed AB 2061 (Chapter 918, Statutes of 2026), which requires the FAIR Plan to post on its website each quarter, among other information, the number of policies it has issued in each ZIP Code and its risk exposure.
What it means: Homeowners, landlords and business owners will be able to check, every quarter, how many FAIR Plan policies have been issued in their ZIP Code. The FAIR Plan already posts policies-in-force counts by ZIP Code; the law makes quarterly ZIP Code posting a legal requirement. As a regular statute with no later start date, it takes effect January 1, 2027.
AB 2724: yearly review of wildfire-distressed areas
Governor Newsom signed AB 2724 (Chapter 961, Statutes of 2026), which requires the Department of Insurance to review and update its list of distressed areas each year based on wildland-urban interface (WUI) maps, starting by July 1, 2027.
What it means: Distressed areas are where the Sustainable Insurance Strategy requires insurers to write more policies, and where existing regulations let insurers use catastrophe modeling, so the yearly update can change which ZIP Codes are covered. The Department must hold at least one public meeting as part of the review and publish a list of ZIP Codes in WUI areas by January 1, 2028. The law also makes the penalty on an insurer that fails to file its required wildfire risk report apply for each 30 days it is out of compliance.
AB 1278: interest on insurance money held by your mortgage lender
Governor Newsom signed AB 1278 (Chapter 877, Statutes of 2026), which lets the interest a lender must pay on home insurance claim money it holds during rebuilding be paid directly to the borrower instead of only credited to the account.
What it means: When a lender holds your claim check in a loss draft account while you repair or rebuild a one-to-four unit home, it already owes at least 2% simple interest a year. Under the new law that interest can be paid to you by check, electronic transfer or another agreed method, annually or when the account closes; a check left uncashed 90 days after delivery is canceled. It takes effect January 1, 2027.
SB 876, the Disaster Recovery Reform Act, is signed
Governor Newsom signed SB 876 (Chapter 656, Statutes of 2026), which changes what home insurers must offer, and how they must handle claims after a declared state of emergency.
What it means: A residential property policy will have to come with an offer of extended replacement cost of at least 50% above the dwelling limit when the home is eligible for replacement cost coverage, and a homeowners policy with a dollar limit on additional living expenses will need an offer of at least 50% more; if you decline, the insurer records it. Building code upgrade coverage is tied to the codes in effect when you rebuild rather than at the time of the loss. On a claim tied to a declared emergency, the insurer must name a primary point of contact within 30 days of the claim and send a written report within 15 days whenever that contact changes. The bill text makes these sections operative January 1, 2028; the Department of Insurance describes the law as phased in beginning January 1, 2027.
SB 1301: 90-day nonrenewal notices and reasons, starting 2028
Governor Newsom signed SB 1301 (Chapter 693, Statutes of 2026), which lengthens the notice a home insurer must give before nonrenewing and requires it to explain why.
What it means: Beginning January 1, 2028, a nonrenewal notice must arrive at least 90 days before the policy ends (now 75), with a plain-language explanation of the grounds and the non-aerial images relied on; inspection reports must be provided within 15 days of a request. If the problem is one the homeowner can fix, the insurer must send notice at least 120 days before expiration and allow at least 90 days to fix it. Insurers also may not nonrenew solely because of certain claims, a policyholder’s earlier inquiry or, in some circumstances, the age of the roof. The current 75-day rule applies until then.
Two claim-handling bills, SB 877 and SB 878, are vetoed
Governor Newsom vetoed SB 877 (residential property insurance loss estimate transparency) and SB 878 (insurance business practices), saying they would codify existing Department of Insurance regulations and guidance that are unnecessary to put in statute now.
What it means: The rules these bills would have written into law stay in Department of Insurance regulations and guidance, so claim document definitions and payment timeframes for policyholders keep their current regulatory footing. Nothing changes on your policy because of the vetoes.
AB 1680, the Make It FAIR Act, adds oversight of the FAIR Plan
Governor Newsom signed AB 1680 (Chapter 540, Statutes of 2026), which requires the California FAIR Plan to carry out corrective actions the Insurance Commissioner identifies in examinations and sets penalties when it does not.
What it means: The FAIR Plan faces a penalty of up to $20,000 for missing an agreed deadline on a corrective action, and other violations carry penalties of up to $10,000 per act, or $20,000 if willful. The Commissioner can also require the FAIR Plan to adjust the policy limits it offers and to add fair rental value coverage options under its renters’ program. The law does not itself rewrite the coverage on an existing FAIR Plan policy; new limits or rental-value options would come through later changes the Commissioner requires.
AB 69: yearly notice of options for FAIR Plan policyholders
Governor Newsom signed AB 69 (Chapter 496, Statutes of 2026), which requires the FAIR Plan to tell every policyholder about their coverage options at least once a year and adds reporting and information sharing to the clearinghouse programs that connect FAIR Plan customers with insurers.
What it means: FAIR Plan customers will get a notice about coverage options with the first policy and at each renewal. Starting May 1, 2027, insurers in the clearinghouse report quarterly how many FAIR Plan policyholders they have written, and the FAIR Plan posts a list of participating insurers. On and after January 1, 2028, the FAIR Plan may share policyholder information with those insurers so they can make offers, which must go to the broker of record at the same time when there is one.
Commissioner urges a coverage check before El Niño storms
After the Governor declared an emergency to prepare for a “likely historic” El Niño, the Insurance Commissioner urged Californians to review their coverage, noting that homeowners, renters and commercial policies typically exclude flood, mudslide and debris flow unless caused by a recent wildfire or another covered peril.
What it means: Flood insurance generally takes effect 30 days after purchase (except when a lender requires it at a home purchase), so it has to be bought before a storm is forecast. Homes near recent burn scars face added mudslide and debris-flow risk, and the Commissioner has reminded insurers of their legal duty to cover mudslide and debris-flow damage caused by wildfires. Optional comprehensive auto coverage can cover a car damaged by flooding or a fallen tree.
Governor Newsom signed AB 1795 (Chapter 240, Statutes of 2026), which sets standards for how insurers investigate, test and restore homes with wildfire smoke damage.
What it means: For a home in the wildfire impact zone, smoke damage is presumed to come from the wildfire (the insurer can rebut it), the insurer pays for necessary sampling and testing, and additional living expenses on a smoke claim cannot be ended until the home is restored and cleared for occupancy. An insurer that chooses to inspect must do so within 30 days of the claim notice or of being given access. The law also orders a Department of Insurance study, due by July 1, 2027, of coverage gaps exposed by the June 2026 Lineage warehouse fire in Boyle Heights, including business interruption and living-expense coverage when no mandatory evacuation order was issued. The Department says some provisions take effect January 1, 2027 and others January 1, 2028 and July 1, 2029.
AB 2361 sets liability amounts for peer-to-peer car sharing
Governor Newsom signed AB 2361 (Chapter 601, Statutes of 2026), which requires a personal vehicle sharing program to assume the owner’s liability to injured third parties in the amounts in its agreement and at least $250,000 for bodily injury or death of one person, $500,000 for all persons and $100,000 for property damage.
What it means: If you list your car on a sharing platform, the program’s responsibility while someone else drives it is now defined by these amounts rather than “all liability” of the owner, and the protection does not apply if the owner acts in concert with a driver who fails to return the car. Read the platform’s agreement and tell your own auto insurer before sharing. The law takes effect January 1, 2027.
Proposal to end marital status as an auto insurance rating factor
Insurance Commissioner Ricardo Lara proposed regulations that would prohibit insurers from using a driver’s marital status as an optional rating factor for private passenger auto insurance, a factor allowed since 1996.
What it means: It is a proposed regulation submitted to the Office of Administrative Law, not a rule in effect. If adopted, insurers that use marital status would have to bring their rating plans into compliance through the Department’s Proposition 103 review, and any resulting rate or class plan changes would remain subject to Department review. Driving record, annual miles and years of driving experience remain the mandatory rating factors.
WCIRB: workers’ comp insurer costs stay high as charged rates show early signs of rising
The Workers’ Compensation Insurance Rating Bureau’s quarterly report on experience through June 30, 2026 found written premium in the first half of 2026 5% higher than a year earlier and an average charged rate slightly above 2025 levels after a decade-long decline.
What it means: The WCIRB projects the combined ratio for accident year 2025 as the highest in more than 20 years and the second straight year above 120%, reflecting higher claim frequency and rising loss and loss adjustment costs. These are statewide figures, not any one employer’s rate. Before a renewal, it is worth checking that your payroll is reported in the right classifications and that your claims record is accurate.
Trucking: no California-specific CHP, CARB or legislative action bearing on truck insurance was found for this period.
Workers’ comp SB 216 (the contractor workers’ comp requirement): no new action was found this period.
Non-renewal moratoriums: no new Department of Insurance moratorium was announced this period; the latest bulletin listed is Bulletin 2026-6.
About this update
Published monthly. Every item links to its primary source and was checked sentence by sentence against it before publishing; the sources govern if anything here differs. This is general information, not legal advice and not a prediction of any premium. Free to quote with a link to this page: “Alishahi Insurance, California insurance market update, October 2026.” Corrections: sam@alishahiinsurance.com.
