New Law Modernizing Disclosure to Homeowners Signed

The Governor signed today AB 2022 (Gaines), which improves the outdated California Residential Property Disclosure Form, to make it more accurate and far easier for policyholders to read. Insurance Commissioner Steve Poizner commended the Legislature and Governor Schwarzenegger in a statement today for making much needed changes to consumer disclosures about homeowners insurance.

"My thanks to Assemblyman Ted Gaines, consumer groups and insurers, who worked tirelessly with my office to craft this bill. It is an enormous improvement over existing law," said Commissioner Poizner. "Existing disclosures are nearly two decades old, and reflect a market that has changed dramatically, AB 2022 will provide consumers with clearer information to help them understand the choices they have when purchasing insurance for their home."

AB 2022 was authored by Assemblyman Ted Gaines, an IBA West member and was supported by IBA West.

"Thanks to the efforts of Assemblyman Gaines and Commissioner Poizner, consumers shopping for homeowners insurance will now have access to more information that will help them to make the right coverage choices," said Kevin Baker, IBA West Presdint.

The legislation requires that specific language that must be provided to anyone shopping for homeowners insurance, laying out a checklist of the major variables in insurance policies. In addition to this disclosure, the Department of Insurance is also drafting regulations that will help provide more accurate and reliable estimates of what it might cost to completely rebuild a destroyed home. Currently, such estimates are unregulated, and may lead homeowners to believe they would need less coverage than they truly need in the event of a disaster.