California SB878 amends insurance policies to ensure timely payments and fair measures of indemnity for residential property losses.

California SB878 modifies insurance policies to ensure timely payments and fair measures of indemnity for residential property losses. Under the bill, insurers must pay the replacement cost for a loss without a deduction for physical depreciation, or the policy limit, whichever is less. If the policy requires the insured to repair, rebuild, or replace the damaged property, the insurer must pay the actual cash value of the damaged property. Insurers cannot place a time limit of less than 12 months for collecting the full replacement cost if the property is in a hazardous materials area.

California SB878 amends insurance policies to ensure timely payments and fair measures of indemnity for residential property losses.

California SB878 modifies insurance policies to ensure timely payments and fair measures of indemnity for residential property losses. Under the bill, insurers must pay the replacement cost for a loss without a deduction for physical depreciation, or the policy limit, whichever is less. If the policy requires the insured to repair, rebuild, or replace the damaged property, the insurer must pay the actual cash value of the damaged property. Insurers cannot place a time limit of less than 12 months for collecting the full replacement cost if the property is in a hazardous materials area.