The California Supreme Court ruled in favor of a state regulation that aims to give homeowners an accurate assessment of the amount of insurance they need to replace their homes in case of a wildfire or other disaster.
On Monday, the court ruled unanimously that the state’s insurance commissioner had the power to issue the 2011 regulation, which requires insurers to include costs like demolition and debris removal into their estimated total to replace a home. The regulation came in the wake of complaints that homes destroyed in wildfires were underinsured because insurers had not presented complete replacement costs.
The Association of California Insurance Companies had countered that the commissioner had exceeded his authority given to him by the state Legislature. The association has not yet commented on the court’s decision.