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SB-523 • 2026

Fire insurance.

Fire insurance.

Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor
Seyarto
Last action
2026-02-02
Official status
Returned to Secretary of Senate pursuant to Joint Rule 56.
Effective date
Not listed

Plain English Breakdown

The official source material does not provide detailed information on the financial costs of earthquakes statewide or how insurance companies will use this new authority.

Fire Insurance and Earthquake Authority Commission

This law allows insurers to consider whether a fire started inside or outside a home when setting insurance coverage for homeowners, and it requires the California Earthquake Authority (CEA) to form a commission by April 1, 2026, to explore expanding its authority.

What This Bill Does

  • Allows insurance companies to differentiate between internal and external fires when determining coverage under homeowners' insurance policies.
  • Requires the CEA to establish a commission by April 1, 2026, to consider expanding its authority.
  • Instructs the commission to explore specified topics including financial estimates for statewide earthquake threats.
  • Repeals these provisions on June 1, 2031.

Who It Names or Affects

  • Homeowners with insurance policies in California
  • Insurance companies that offer homeowners' insurance
  • The California Earthquake Authority and its governing board

Terms To Know

California Earthquake Authority (CEA)
An organization set up by the state to sell basic residential earthquake insurance policies.
Commission
A group of people appointed to study a specific issue and make recommendations.

Limits and Unknowns

  • The bill does not specify what happens if the commission's work is delayed beyond April 1, 2027.
  • It is unclear how insurance companies will use this new authority in practice.
  • The bill does not provide details on how the CEA will fund its commission.

Bill History

  1. 2026-02-02 California Legislative Information

    Returned to Secretary of Senate pursuant to Joint Rule 56.

  2. 2026-01-05 California Legislative Information

    From committee with author's amendments. Read second time and amended. Re-referred to Com. on INS.

  3. 2025-04-02 California Legislative Information

    Re-referred to Com. on INS.

  4. 2025-03-24 California Legislative Information

    From committee with author's amendments. Read second time and amended. Re-referred to Com. on RLS.

  5. 2025-03-05 California Legislative Information

    Referred to Com. on RLS.

  6. 2025-02-21 California Legislative Information

    From printer. May be acted upon on or after March 23.

  7. 2025-02-20 California Legislative Information

    Introduced. Read first time. To Com. on RLS. for assignment. To print.

Official Summary Text

SB 523, as amended, Seyarto.
California Earthquake Authority: commission.
Fire insurance.
Existing law generally regulates classes of insurance, including residential property insurance. Existing law prescribes the standard form for fire insurance policies covering property.
This bill would, under a homeowners’ insurance policy, authorize an insurer to differentiate the risk of an internal fire from the risk of an external fire for the purposes of determining coverage. The bill would define terms for purposes of this provision.
Existing law establishes the California Earthquake Authority (CEA), administered under the authority of the Insurance Commissioner and governed by a 3-member governing board, to transact insurance in this state as necessary to sell policies of basic residential earthquake insurance. Under existing law, the CEA’s governing board is advised by an appointed advisory panel.
This bill would require the CEA to establish a commission, to convene no later than April 1, 2026, to consider expanding the authority. The bill would require the commission to be composed of the board members or their designees. The bill would also require the commission to explore
specified topics, including financial estimates for statewide earthquake threats. The bill would require the commission to conclude its work no later than April 1, 2027, and to submit a report to the Legislature no later than June 1, 2027, on the feasibility of creating a disaster insurance program in California. The bill would repeal these provisions on June 1, 2031.

Current Bill Text

Read the full stored bill text 
Download Bill PDF