California Insurance Commissioner Suspends All Statutory and Contractual Deadlines For 90 Days After the Termination of State of Emergency
California Insurance Commissioner Ricardo Lara has suspended all statutory and contractual deadlines associated with insurance claims for 90 days past the termination of California’s current COVID-19 State of Emergency. The Commissioner’s Notice does not mention the claims handling deadlines set by the Department of Insurance’s own regulations. Not only does this have immediate effects, but it will also have an impact for several years into the future.
California Governor Gavin Newsom declared a State of Emergency regarding COVID-19 on March 4, 2020. That State of Emergency is open-ended and will end only when the Governor says so. The Insurance Commissioner’s action applies, at a minimum, to “deadlines for the submission of a sworn proof of loss, other claim forms, examinations under oath, medical examinations, physical inspections of insured property, separating damaged property from undamaged property, temporary repairs to prevent further damage, and any other policy, statutory, or insurer imposed deadlines placed on the policyholder where failure to comply could result in the forfeiture, limitation or waiver of any policyholder(s) rights to benefits under any policy of insurance.”
The Notice is silent regarding the Commissioner’s own Fair Claims Handling Regulations, so the time limits for insurer and adjuster conduct under those Regulations remain in full force and effect. Only policyholders get a pass.
The downstream impact of this Notice is still somewhat unknown. First, we don’t know when it will end. Given that California’s Stay at Home orders now extend through May 3, 2020, and may well be extended beyond that date, the earliest the suspension of deadlines will end is August 1, 2020. Second, what happens when a policyholder’s now excused inaction (for example in having temporary repairs performed) aggravates the damage to the insured property?
Andrew B. Downs
San Francisco, Shareholder
Direct Dial: 0415.352.2716