Newsom Vetoes Insurance Reforms For Wildfire Victims After They Oppose Utility Bailout, Says Consumer Watchdog

SACRAMENTO, Calif., Sept. 28, 2026 /PRNewswire/ -- Governor Newsom vetoed two bills to help wildfire survivors that had bipartisan support and no opposition after wildfire victims and consumer advocates led the campaign to stop his utility bailout in the last days of the legislative session.

SB 877 and SB 878 (Pérez) changed insurance claims-handling practices to help wildfire survivors and all Californians get the insurance benefits they paid for.

SB 877 would have required insurers to show policyholders their original loss estimates and any revisions, bringing transparency to changes that insurance companies keep secret and can result in severe underpayments. It passed the Senate by a vote of 40 to 0 and the Assembly by a vote of 78 to 1. 

SB 878 would have put consequences behind claims delays, requiring insurers to put claims decisions in writing faster and pay interest when they hold onto money that should be helping families rebuild. It passed the Senate by a vote of 37 to 3 and the Assembly by a vote of 70 to 9. 

"Honest estimates and timely payment of insurance claims can mean the difference between Californians getting home and financial ruin. SB 877 and 878 gave wildfire survivors critical new rights to hold insurance companies to their end of the deal. Their veto appears to be a retaliation against wildfire victims who stood up against Governor Newsom taking their rights during the last month of session. It's unbecoming of a public official," said Carmen Balber, executive director of Consumer Watchdog.

Wildfire survivors and consumer advocates opposed efforts by the governor last month to reduce for-profit utilities' liability for fires they cause by taking away wildfire victims' rights to recover for harm. 

SB 877 and 878, introduced by Senator Sasha Renée Pérez and co-sponsored by Consumer Watchdog and Every Fire Survivor's Network (EFSN), grew out of hundreds of complaints gathered by EFSN from families unable to get home after the January 2025 Eaton and Pacific Palisades fires due to insurance delays, denials and underpayments. Seventy percent of LA fire survivors said insurance problems were standing in the way of recovery.

In his veto statement, the Governor claimed that insurance regulations imposed by insurance commissioner Ricardo Lara, the "Sustainable Insurance Strategy," made the bills "unnecessary at this time." However the commissioner's regulations have nothing to do with insurance claims-handling or the delays and underpayments directly addressed by SB 877 and 878. Those regulations were supposed to improve insurance availability but failed, as Consumer Watchdog found in an analysis released last week. Insurance companies have sought over $570 million in rate hikes under the regulations, but promised to add just 12,000 new insurance policies in a state where hundreds of thousands of homeowners have lost their insurance. 

SB 878 was also co-sponsored by the Department of Insurance and supported by 40 wildfire survivor, consumer, environmental, civil and economic justice, labor, small business, and community organizations.

SOURCE Consumer Watchdog