AB 297

Under current law, an insurer may not cancel an insurance policy before the end

of the term except for nonpayment of premiums or on grounds provided in the policy

and permitted by statute, including material misrepresentation, a substantial

change in the risk assumed, substantial breaches of contractual duties, or

attainment of the terminal age for coverage. Also under current law, an insurer must

renew an insurance policy at the end of the term unless the insurer provides 60 days'

written notice that the policy will not be renewed. The notice must state the reasons

for the nonrenewal. In addition, if an insurer renews a policy but on less favorable

terms, the new terms take effect on the renewal date if the insurer provides at least

60 days' written notice of the change in the terms, otherwise the new terms take

effect 60 days after the notice was sent.

This bill prohibits an insurer from doing any of the following with respect to a

fire or other property insurance policy solely because one or more claims have been

made under the policy for unpreventable damages caused by the forces of nature,

such as a tornado, hail, wind, rain, sleet, frost, or lightning: canceling the policy

before the end of the term, refusing to renew the policy, reducing the limits under the

policy, or eliminating any type of coverage under the policy.