This legislation asserts that it does not change existing laws but rather affirms them, emphasizing its role as a declaratory act. It reinforces the principle that an insurer can be held liable when a combination of conditions leads to a claim, thus providing assurance to policyholders affected by natural disasters involving multiple contributing factors. The law aims to prevent ambiguity in insurance claims and ensure that policyholders are protected against significant peril combinations that might otherwise not be covered.
Senate Bill 917, introduced by Senator Jackson, seeks to amend the California Insurance Code by adding Section 530.5, which stipulates that insurance coverage must be provided for losses resulting from a combined effect of multiple perils, specifically when one of those perils includes a landslide, mudslide, mudflow, or debris flow. The bill establishes that if an insured peril is identified as the efficient proximate cause of the loss or damage, then coverage shall be granted under the same terms as other insured perils. This addition aims to clarify the obligations of insurers when faced with such multi-causal losses.
Overall, the sentiment surrounding SB 917 is positive among advocates of consumer protection, as it aims to bolster coverage for those affected by natural disasters. Supporters argue that this bill will ensure that homeowners and property owners are not left vulnerable due to the complexities of insurance claims that involve multiple causes of loss. However, there may be concerns from some insurance providers regarding the potential increase in their liability and the risk assessment associated with covering such peril combinations.
Despite its declaratory nature, SB 917 does raise some points of contention among industry stakeholders. Critics from the insurance sector may highlight that the bill could lead to an increase in claims and potentially higher premiums as insurers adjust their risk models to account for the newly clarified coverage requirements. Furthermore, the lack of significant changes in liability or coverage definitions may stoke disagreements on whether such legislative interventions are necessary, thereby sparking discussions about the balance between consumer rights and the financial health of insurance providers.