Pasadena Assemblymember Introduces Bill to Shield Wildfire Victims From Insurance Fee Gouging

A new California bill aims to protect wildfire survivors and other disaster victims from excessive fees and unfair practices by public insurance adjusters.

Assemblymember John Harabedian (D-Pasadena) introduced AB 597 – The Insurance Payment Protection Act on Friday. If passed, the bill would set new safeguards to protect policyholders from unfair fees and price gouging by public adjusters after major disasters.

“Public adjusters should help wildfire survivors rebuild, not wreck their recovery. Some public adjusters will charge excessive fees or take a portion of homeowners’ insurance payouts through unfair practices. I’m proud to partner with Commissioner Lara on AB 597 to ensure wildfire survivors get every dollar they deserve to rebuild their lives,” said Assemblymember John Harabedian (D-Pasadena).

The legislation, sponsored by the California Department of Insurance, addresses growing concerns about policyholder exploitation during vulnerable periods after disasters. Inspired by the need to safeguard policyholders during vulnerable times, the bill applies to both residential properties and certain commercial properties, particularly following major disasters.

“As disasters become more frequent and severe, my responsibility is to assist wildfire survivors in their recovery. This proposal is designed to safeguard them from unfair charges and exploitation, ensuring that consumers keep as much of their insurance claims as possible to support their recovery and rebuilding efforts. I am proud to collaborate with Assemblymember Harabedian on this vital consumer protection bill,” said Commissioner Lara, sponsor of the legislation.

The Insurance Payment Protection Act includes provisions allowing policyholders to cancel contracts if public adjusters violate the law or solicit business during prohibited periods. Additionally, the bill requires public adjuster contracts to clearly outline the services being provided, including specifying which claims and coverages they will handle, promoting transparency in the recovery process.

The bill will be heard in Assembly policy committees during the spring.