Governor Newsom Vetoes Wildfire Insurance Reform Bills Amid Opposition to Utility Bailout
California Governor Gavin Newsom vetoed two bipartisan bills, SB 877 and SB 878, aimed at improving insurance claims handling for wildfire survivors. The legislation had strong legislative support but was blocked by the governor after victims and consumer advocates opposed a utility liability reduction proposal he pushed in late session. Both bills sought to increase transparency and accountability from insurers: SB 877 would require disclosure of original loss estimates and revisions, while SB 878 aimed to expedite claims decisions and impose interest on delayed payments. Consumer Watchdog criticized the veto as retaliatory against wildfire survivors who resisted Newsom’s utility bailout. The bills were co-sponsored by advocacy groups like Every Fire Survivor's Network (EFSN), which collected hundreds of complaints from families affected by insurance delays following January 2025 fires in Eaton and Pacific Palisades. Despite passing both chambers with wide margins, the governor argued that existing regulations under Insurance Commissioner Ricardo Lara made them unnecessary. However, analysis shows these regulations have failed to improve coverage or address claims issues directly tackled by SB 877 and 878. Insurers are seeking over $570 million in rate hikes while adding only a small number of new policies, exacerbating the crisis for many uninsured homeowners.
Topics: bipartisan legislation governor veto insurance claims wildfire survivors