Newsom vetoes insurance-claim bills: Is it ‘petty’ politics?

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Gov. Gavin Newsom vetoed two bills that would have helped improve the insurance-claims process for consumers but signed one that also addresses claims-related issues, leaving Los Angeles County fire survivors and others wondering whether the vetoes were retaliatory.

One bill, Senate Bill 877, would have required insurance companies to explain in more detail to their customers how their claims payments are calculated. Another, SB 878, would have required insurers to pay claims within a certain amount of time, and imposed penalties for delays.

In his veto statement Sunday, the governor said the bills codified existing regulations and were “unnecessary at this time.”

But he signed SB 876, which among other things requires insurers to send their customers a status report within 15 days of assigning a new adjuster to their claims; doubles penalties during a declared emergency when insurers violate fair claims practices and settlement law; and mandates that insurers send a disaster-recovery plan to the Insurance Department.

Newsom’s office would not provide more information. Spokesperson Anthony Martinez said the governor’s veto message speaks for itself, and pointed to other legislation Newsom signed that helps survivors, such as setting new smoke-damage standards.

Martinez did not respond to a question about an accusation that the governor vetoed the two bills because they were sponsored by fire survivors and a consumer advocacy group who fought against his failed effort to reduce utilities’ liability for wildfires they cause.

Carmen Balber, executive director of Consumer Watchdog, told CalMatters that all three bills “were along the same vein, addressing claims-handling problems,” although they did not overlap. The difference, she said, was that the two bills Newsom vetoed were sponsored by her group and Every Fire Survivors Network.

“It’s a real black mark on the governor that he would throw survivors under the bus in that way for what appears to be a petty reason,” Balber said.

Democratic state Sen. Sasha Renée Pérez wrote SB 877 and 878, prompted by experiences of fire survivors she represents in Altadena. She pushed back against the governor’s veto statement, saying existing regulations have not been enough to avoid insurers’ delays and denials of survivors’ claims. As an example, she pointed to the insurance department’s findings that State Farm violated laws in its handling of L.A. fire survivors’ claims.

“I would hope (the decision) is not because of politics and petty infighting,” Pérez told CalMatters.

The senator added that her bills got bipartisan support and that the insurance industry eventually dropped their opposition to them. She noted that some survivors of the January 2025 fires are still navigating their claims. “The reality is that this decision is going to have an impact on survivors’ recovery,” she said.

Every Fire Survivors Network agreed.

“These vetoes mean more families will face what we have faced: rebuilding stalled, bills piling up, and lives on hold while waiting for insurance money they are owed,” said Joy Chen, executive director of the group, in a statement.

Pérez, Consumer Watchdog and Every Fire Survivors Network vowed to try again next session.

Insurance Commissioner Ricardo Lara was also a co-sponsor of SB 878 but had no comment on the governor’s veto, although his office issued a statement celebrating the signing of SB 876: “It holds insurers accountable when they drag their feet.”

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.