New homeowner’s insurance regulations have taken effect in California. According to Insurance Commissioner Dave Jones, the new regulations will offer new protections to consumers against being under insured. Part of the aim of the new regulations is to improve upon the state’s standard regarding natural disasters and catastrophic damage to homes. Furthermore, homeowners will no longer be able to purchase “too little” coverage, as the new regulations mandate a minimum level of insurance coverage based upon the property being insured.
The regulations have ruffled the feathers of the Association of California Insurance Companies. Two weeks ago, the association filed a lawsuit that sought to bar the new regulations from taking effect. Their primary concern was a provision in the new regulations that requires California insurers to use language that is more readily understood when communicating with consumers. The association argues that the provision restricts a company’s ability to communicate with its customers and punishes these companies for “perfectly legitimate conduct.”
Jones dismisses these concerns, however, saying the regulations will serve to help consumers. Any changes a company has to make to accommodate the new regulations, says Jones, is negligible.
“Insurers have clearly missed the mark with this lawsuit and their argument has no merit,” Jones said in a statement issued yesterday. He went on to note that insurers will still be able to decide which customers to sell to and the price of their policies, as long as they adhere to the state’s regulations.