Insurance Commissioner Ricardo Lara today issued a Notice instructing all insurance companies to stop enforcing policy or statutory deadlines on policyholders for claims or coverage until 90 days after the statewide “state of emergency” or any other “state of emergency” has ended related to COVID-19. The Commissioner issued this latest Notice to protect policyholders from losing, limiting, or waiving policy benefits as a result of the current national state of emergency.
“We have a social responsibility to follow the directives of health care experts as well as federal, state, and local public health leaders as we work to slow the spread of COVID-19,” said Commissioner Lara. “As our nation faces the greatest public health emergency of our time, policyholders should not be forced to lose their coverage or benefits because they cannot meet a deadline while complying with federal or state directives.”
Insurers were notified that they should not attempt to enforce statutory deadlines on their policyholders for claim forms, proof of loss, medical examinations, and physical inspections, or any other deadlines which, if not met, could force policyholders to lose their coverage.
Commissioner Lara issued this latest Notice to also assist wildfire claimants after the Department of Insurance began receiving complaints that some insurance companies are insisting their insureds who suffered losses from the November 2018 fires must continue to repair or rebuild their homes during this COVID-19 crisis if they wished to obtain the full replacement cost and additional living expense (ALE) benefits owed to them. This, however, is inconsistent with applicable law that requires insurers to provide no less than 36 months, plus additional 6 month extensions for “good cause,” for insureds to collect full replacement cost and ALE for delays in the reconstruction process that are the result of circumstances beyond the control of the insured such as unavoidable construction permit delays, lack of necessary construction materials, and lack of available contractors to perform the necessary work. Commissioner Lara and the California Department of Insurance have determined that the current COVID-19 pandemic is a circumstance beyond the control of the insured, thereby constituting “good cause” under the applicable laws.