Regulations Would Require Companies To Reveal Costs To Replace Homes After Disaster
SAN DIEGO — Despite a lawsuit trying to stop it, state Insurance Commissioner Dave Jones implemented new regulations requiring insurance companies to reveal the true and complete costs to homeowner who want to replace their home after a disaster, like a wildfire.
“In the 2007 wildfire, many homeowners found out they were underinsured. These new regulations will correct that,” Jones said in a press conference Monday in Rancho Bernardo.
“When insurance companies talk with homeowners about replacement policies, they don’t always reveal all that’s involved,” added Jones.
“The price of your home is not what it costs to replace it,” said Amy Bach with United Policyholders, a nonprofit group representing homeowners.
An insurance trade association has filed a lawsuit trying to stop at least one aspect of new regulations, claiming they will have to follow a mandatory formula and use specific words when explaining replacement costs and that any deviation will result in punishment.
Jones vowed to fight the lawsuit, and said while the new regulations could cost homeowners more in the way of premiums if they opt for complete replacement, homeowners will have the information they need to make a decision.