California Governor Gavin Newsom vetoed two bills that would have tightened rules on how insurers handle claims, prompting accusations from sponsors and fire survivors that the rejections were retaliatory, CalMatters reported.
The bills, Senate Bill 877 and SB 878, were sponsored by Consumer Watchdog and the Every Fire Survivors Network and written for survivors of the January 2025 Los Angeles County fires, some of whom are still pursuing their claims, according to CalMatters.
SB 877 would have required insurers to explain in more detail how claims payments are calculated. SB 878 would have required insurers to pay claims within a set period and imposed penalties for delays.
In his veto statement on Sunday, Newsom said the bills codified existing regulations and were “unnecessary at this time,” according to CalMatters.
Newsom signed a third bill, SB 876, which requires insurers to send customers a status report within 15 days of assigning a new adjuster, doubles penalties during a declared emergency for violations of fair claims practices and settlement law, and requires insurers to send a disaster-recovery plan to the Insurance Department.
Newsom spokesperson Anthony Martinez said the veto message speaks for itself and pointed to other signed legislation helping survivors, including new smoke-damage standards, according to CalMatters. He did not respond to a question about whether Newsom vetoed the bills because their sponsors opposed 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,” and differed mainly in sponsorship.
“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 Senator Sasha Renée Pérez, who wrote SB 877 and 878 for survivors she represents in Altadena, said existing regulations had not stopped insurers’ delays and denials, pointing to the insurance department’s findings that State Farm violated laws in its handling of L.A. fire survivors’ claims.
“The reality is that this decision is going to have an impact on survivors’ recovery,” Pérez told CalMatters.
Pérez said her bills drew bipartisan support and that the insurance industry eventually dropped its opposition. Insurance Commissioner Ricardo Lara, a co-sponsor of SB 878, had no comment on the veto, though his office said of SB 876: “It holds insurers accountable when they drag their feet.”
“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,” Joy Chen, executive director of the Every Fire Survivors Network, said in a statement.
Pérez, Consumer Watchdog and the Every Fire Survivors Network said they would pursue the measures again in the next legislative session.