Gov. Gavin Newsom vetoed SB 877 and SB 878, two bills aimed at increasing transparency and accountability in insurance claims after disasters. The measures would have required insurers to disclose initial loss estimates, provide written explanations for claim decisions, and pay interest on late payments. Survivors of the January 2025 Eaton and Palisades fires and advocacy groups criticized the veto and say they will reintroduce the proposals next year to help families rebuild and communities recover.
Wildfire Survivors Condemn Newsom’s Veto Of Insurance-Transparency Bills; Advocates Plan New Push
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Survivors of the January 2025 Eaton and Palisades wildfires and consumer advocates sharply criticized Gov. Gavin Newsom after he vetoed two bills intended to bring more transparency and accountability to insurance claims after disasters.
What The Bills Would Have Done
SB 877 and SB 878, developed with input from lawmakers, the California Department of Insurance, industry representatives, Every Fire Survivors Network and Consumer Watchdog, were designed to help policyholders understand how insurers value losses and reach claim decisions. Sen. Sasha Renée Pérez (D-Pasadena) introduced the measures, with Sen. Ben Allen (D-El Segundo) listed as a co-author.
SB 877 would have required insurers to disclose their initial estimate of a policyholder’s loss along with any subsequent adjustments so homeowners could spot reductions that shrink a payout. SB 878 would have required written explanations for claim decisions and mandated interest payments on delayed benefit disbursements.
Governor’s Rationale And Advocates’ Response
In his veto message, Gov. Newsom said that regulations issued by California Insurance Commissioner Ricardo Lara made the bills "unnecessary at this time."
"These were basic protections: tell us how our claims are being valued, explain your decisions, and pay us what we are owed on time," said Joy Chen, executive director of Every Fire Survivors Network.
Chen and other advocates said the proposals grew directly from survivors’ experiences after the Eaton and Palisades fires, where many claim payments were delayed or far lower than policyholders expected. They warn that when insurance fails to deliver after disasters, families face immediate hardship, slower rebuilding, and broader setbacks for neighborhood recovery and housing stability.
Next Steps
After the vetoes, Every Fire Survivors Network and Consumer Watchdog condemned the decision and said they plan to reintroduce the protections next year. Advocates contend that clearer, enforceable standards — including disclosure of initial loss estimates, written claim explanations and interest on late payments — would help families rebuild faster and support community recovery.
Why it matters: Disputes with insurers can be a major obstacle after disasters, leaving homeowners without timely funds for temporary housing and rebuilding and exacerbating California’s ongoing housing challenges.
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