What does SB 876 require of California home insurers, and when?

SB 876 was approved by the Governor and filed with the Secretary of State on September 27, 2026. It is Chapter 656, Statutes of 2026, by Senator Steve Padilla, and Insurance Commissioner Ricardo Lara sponsored it.

The Department of Insurance calls it the Disaster Recovery Reform Act. In an alert dated September 29, 2026, the Department said the law takes effect January 1, 2027.

The changes themselves wait another year. The Legislative Counsel's summary says the bill would "make its provisions operative on January 1, 2028," and each rewritten section of the Insurance Code carries that date.

Until then, today's sections stay in place. Everything below describes the rules from January 1, 2028, unless it says otherwise.

Extended replacement cost pays above your dwelling limit when rebuilding costs more than planned. California's required disclosure form says it "provides additional coverage above the dwelling limits up to a stated percentage or specific dollar amount."

With 50%, a home insured for $500,000 to rebuild could draw up to $750,000 for the house. The glossary defines extended replacement cost and the dwelling limit, often called Coverage A.

Until January 1, 2028, the law asks only for a notice. Since July 1, 2020, an applicant not offered at least 50% must be told such policies "may be available." The notice gives the web address of the Department's Homeowners Coverage Comparison Tool.

From January 1, 2028, a home policy "shall not be issued or renewed in this state" without an offer of at least 50% above the dwelling limit. The offer must come with its price.

The offer is not a requirement to buy. If you decline, the insurer must record it, and your declarations page must show that at least 50% was offered and declined.

The 50% is measured on the dwelling limit for the house itself. The rule applies only where the property is eligible for replacement cost coverage.

Since July 1, 2019, an insurer that sells replacement cost coverage has had to give a rebuild estimate every other year, with the renewal offer. The estimate must follow the Department's standards for estimates of replacement cost.

Until January 1, 2028, Section 10103.4 excuses an insurer in two cases. In one, you asked for and got higher limits in the past two years. In the other, the insurer offers a new estimate every other year and adjusts the renewal limit for local building costs.

SB 876 deletes both exceptions from January 1, 2028. From that date, the rule also reaches FAIR Plan policies that offer replacement cost, when the limit is below the Plan's highest combined limit.

The new section still ties the estimate to the renewal offer, every other year. Checking your dwelling coverage explains what an estimate must include and how to read one.

Most of SB 876 deals with claims, especially after a declared state of emergency. The living expense changes, including 15 more days of coverage once the home is livable, are in the 24-month living expense guide.

These are the other main changes, each from January 1, 2028:

• Building code upgrade coverage pays for codes in effect when you rebuild and required for the rebuild.
• A policy may note limits on that coverage for codes that take effect more than three years after the loss.
• After a total loss, if you rebuild elsewhere or buy a home, code upgrade pay includes what rebuilding at the old address would have cost.
• A policy that caps living expenses in dollars must come with a priced offer of extended living expense coverage, at least 50% above the cap.
• On a disaster claim, the insurer must name one main contact within 30 calendar days of your notice of the claim.
• If that contact changes, the insurer must send you a written status report within 15 calendar days.
• Within 15 calendar days of a disaster claim, the insurer must also give you a toll-free number for claim and coverage questions.
• The Insurance Commissioner may order an insurer to repay a claimant's direct financial loss from an unfair claim practice.

Every home insurer doing business in California must send the Department a disaster response plan before April 1, 2028, and update it every two years. The plan covers how it will handle claims, staff, adjusters and contact with customers.

After a declared state of emergency with covered losses, an insurer must report its losses, claims and estimated total losses. The report is due to the Commissioner within 30 calendar days of the declaration.

Fines rise too. An unfair or deceptive practice tied to a declared emergency can cost an insurer $5,000 to $10,000 per act, or $10,000 to $20,000 if willful. Until January 1, 2028, the cap is $5,000, or $10,000 if willful.

Some standard insurers must report home policy data by April 1, 2028, and every two years after. The rule covers those with $20 million or more in written California premiums. Each report covers three years, with each home's address, building details and fire losses.

You do not have to wait for 2028. You can ask for extended replacement cost now, and today's law already requires a notice when 50% is not offered.

Ask your insurer in writing what percentage your policy carries, what 50% would add to your price, and for a copy of your latest rebuild estimate.

When you compare quotes, match the dwelling limit and the extended percentage, so the prices line up.

If you have an open claim, ask your insurer in writing which version of these rules it is applying to it.