California Assembly Bill AB2801

California 2021-2022 Regular Session

• Introduced: 2/18/22
• Refer: 3/17/22

Caption

Property insurance: notice of cancellation.

Impact

If enacted, AB 2801 would maintain existing notice requirements for substantial cancellations while making adjustments that are intended to clarify the language of the law rather than alter the substantive rights of insured individuals and the practices of insurers. The bill reflects the ongoing legislative effort to ensure that the insurance process remains clear and that consumers are adequately informed regarding the status of their insurance policies. The focus is on protecting residential property owners who rely on timely notifications of policy changes.

Summary

Assembly Bill No. 2801, introduced by Assembly Member Rodriguez, seeks to amend Section 677.4 of the California Insurance Code, specifically concerning the notice requirements for cancellation of property insurance policies. Current law mandates that insurers provide notice of cancellation to policyholders at least 20 calendar days before the cancellation date for certain types of property insurance. However, in cases involving nonpayment of premiums or fraud, this notice period is reduced to at least 10 calendar days prior to cancellation. AB 2801 intends to implement a technical, nonsubstantive change to this provision.

Contention

Though substantive changes are not introduced by the bill, the legislative discussions that accompany bills like AB 2801 can often unveil differing opinions on insurance notification practices. Proponents may argue for clearer, more accessible communications from insurers to policyholders, while some may point to the existing framework's sufficiency or raise concerns over potential loopholes in notification procedures. The expectation is that maintaining a rigorous standard for notifications aligns with consumer protection efforts in the insurance sector.