Governor Newsom pushes for fair insurance payments to homeowners recovering from wildfires
California – Governor Gavin Newsom today revealed his sponsorship of new legislation allowing disaster-affected homeowners to preserve interest accrued on insurance claims in an important move meant to provide relief to Californian residents impacted by the devastating wildfires. This idea is seen as an essential initial move in guaranteeing complete financial support for survivors of the LA-area firestorm and other disasters throughout the state during their rehabilitation.
Designed by Assemblymember John Harabedian (D-Pasadena), the measure seeks to close the current legal vacuum allowing lenders to collect interest on insurance funds kept in escrow following a disaster. Critics of this approach have pointed out that it helps financial institutions at the price of homeowners trying to reconstruct their life.
“Homeowners rebuilding after a disaster need all the support they can get, including the interest earned on their insurance funds. This is a commonsense solution that ensures that they receive every resource available to help them recover and rebuild,” Governor Newsom stated.
He further emphasized that the focus should be on aiding citizens directly affected by the tragedies, rather than allowing financial institutions to profit from their plight.
The proposed legislation would change state law to mandate that homeowners, not lenders, get paid interest on insurance reimbursements kept in escrow. California law now requires lenders to pay homeowners interest on escrowed cash for property taxes and insurance, but it does not apply to insurance reimbursements for losses resulting from natural disasters.
For those who have sustained losses in the fires, Assemblymember Harabedian emphasized the value of this measure.
“Many Angelenos devastated by these wildfires have lost nearly everything; they are struggling and need every bit of financial support. This bill puts people over profits, ensuring that rightful insurance payments go to those who need them most,” Harabedian explained.
This legislation has importance not only in terms of financial gains but also in terms of justice and support of disaster reconstruction. Giving homeowners access to the interest on their insurance claims will help to give necessary money for restoring houses and life. Moreover, this measure aims to match escrowed insurance payouts with other escrowed property expenses, thereby not burdening lenders but only extending current procedures.
Governor Newsom has also been aggressive in other areas to hasten attempts at recovery. He signed an executive order on January 12 to expedite the reconstruction of businesses and houses devastated by the flames. Under the California Environmental Quality Act (CEQA) and the California Coastal Act, this pattern consists of deferring some permit procedures and reviews aimed to streamlining red tape and hastening recovery.
Read also: Redwood City welcomes Baraka Carter to lead its fire services and emergency response
This legislative proposal complements a set of initiatives by the Governor’s office meant to assist Californians following natural events, so guaranteeing that recovery is not only quick but also fair. The state wants to promote a recovery process that rebuilds not just buildings but also the life of people impacted by concentrating on the rights and requirements of homeowners.
