CA Bill 597 Passes: What It Means for Your Insurance Claim Process

California’s AB 597 has now passed, marking a significant change in the insurance claim process for homeowners and businesses. This bill amends the Public Insurance Adjusters Act, adding new rules governing how public adjusters contract, charge fees, and approach policyholders. SunPoint Public Adjusters breaks down the bill’s journey, what it means for your insurance claim process, and how you can take action to protect your rights.

Background: What AB 597 Really Does

AB 597 rewrites Insurance Code §15027 in ways that may ultimately harm policyholders, especially wildfire survivors and small businesses. While framed as a consumer protection bill, the reality is more troubling: it restricts how and when public adjusters can help, and how they’re compensated, potentially leaving policyholders with fewer tools to fight unfair settlements.

Here’s what the bill changes:

• Restricts contracts between public adjusters and policyholders by requiring services to be narrowly described, potentially limiting adjusters’ flexibility to respond to a claim’s evolving needs.
• Bans fees on insurance payouts issued before the contract date (known as “old money”), even if the adjuster helps secure those funds. This discourages adjusters from stepping into mid-claim situations where they’re often most needed.
• Caps fees at 15% for claims during declared emergencies, regardless of complexity, making it financially unfeasible for adjusters to take on many high-effort, post-disaster claims.
• Gives policyholders indefinite contract rescission rights if misrepresentation occurred, or five-day cancellation windows for losses during states of emergency. While this sounds protective, it adds uncertainty that may make adjusters hesitant to engage.
• Limits when and how adjusters can contact policyholders, banning contact during active losses, between 6 p.m. and 8 a.m., or through representatives, delaying urgent assistance in the critical first hours of a disaster.

While AB 597 is presented as improving clarity and fairness, its real effect may be to weaken the negotiating power of policyholders, especially in times of crisis, by making it harder to find experienced advocates willing to take on their claims.

New Legislation Details

AB 597, authored by Assemblymember Harabedian with backing from Insurance Commissioner Lara, was pitched as a measure to protect consumers from overzealous adjusters. However, industry leaders, including SunPoint CEO Gregg Clifford, warn that it “creates incentives for insurance companies to lowball upfront payments and trap victims,” increasing the risk that policyholders accept inadequate initial settlements. This setup not only penalizes survivors but also effectively arms insurers with a delay-and-pay strategy, knowing adjusters may not step in for minimal additional funds.

These changes come amid growing alarm among wildfire survivors and industry advocates. Capitol Weekly warned that AB 597 “will make the struggles of fire victims even harder” by stripping away one of their few supports against underpaid claims. The Pacific Coast Association of Public Insurance Adjusters warns that without viable fees, policyholders may be left without representation during the claims process.

Why AB 597 Could Hurt Policyholders

AB 597 introduces a number of barriers, including:

• 1. Fees based solely on post-contract recoveries discourage adjusters from taking mid-claim cases, where further negotiation can significantly enhance payouts. This deepens challenges in the insurance claim process, especially for partially settled claims.
• 2. The “old money” fee ban tilts the insurance claim process toward insurers, who may issue token payments just to avoid public adjuster involvement.
• 3. Narrower compensation may scare adjusters away, leaving after-wildfire or complex cases underserved.
• 4. SunPoint emphasizes that these issues force policyholders into a tougher insurance claim process, often up against insurance companies with deep resources.

Understanding the Impacts on the Insurance Claim Process

AB 597 redefines the insurance claim process timeline by limiting when adjusters can intervene and how they are compensated. With fewer professionals willing to take on underpaid claims, policyholders may face delayed settlements, reduced recovery, and greater difficulty navigating the system.

At SunPoint, we see the fallout: consumers left alone to bear frustration, confusion, and financial strain. Public adjusters remain vital advocates, especially when insurance companies delay or deny claims.

Next Steps: What You Can Do

Here’s how homeowners and businesses can respond:

1. 1. Contact your state senator and assembly member to express concern about AB 597’s impact on the insurance claim process.
2. 2. Engage advocacy groups like PCAPIA and wildfire survivor networks fighting the bill’s current form.
3. 3. Track AB 597 on the California Legislature website and upcoming committee hearings.
4. 4. Review your policy now to understand your coverages, deadlines, and claims support needs.
5. 5. Prepare for change by collecting claim documentation, photos, and any pre-contract insurer communications to strengthen your insurance claim process if adjuster access becomes limited.

CA Bill 597 threatens to disrupt the insurance claim process for Californians. Whether you’re a homeowner or business owner, stay informed, act now, and count on SunPoint for support.

Need help? Contact us today by calling 888-247-7865 to strengthen your insurance advocacy and ensure you receive what you are owed.

SunPoint Public Adjusters, Inc. Advocates Only for the Insured’s Benefit

SunPoint Public Adjusters, Inc. (“SunPoint”) is the “Gold Standard” of the Public Adjusting industry. We comprehensively review and evaluate your insurance settlement, immediately deploy a team of specialists to assess and quantify your damages, and customize a strategy around your recovery.

Our in-house experts and external veteran professionals are experienced in quantifying and negotiating building, personal property, or other additional coverages. We work solely on your behalf to resolve your claim favorably. Our team ensures your insurance company does not delay, diminish, or deny benefits rightfully owed to you. Industry authorities agree that having a public adjuster like SunPoint on your side early in the process expedites and maximizes your recovery.

Policyholders have been benefiting from our knowledge and advocacy for decades. We have handled, managed, and successfully navigated claims ranging from homeowner losses to corporate losses in the hundreds of millions of dollars, disaster losses involving government entities and entire municipalities, agricultural and recall losses, and virtually any type of disaster claim that could be imagined. 

Our team of Public Adjusters, building cost consultants, inventory specialists, forensic accountants, and equipment consultants is unmatched in our industry. It’s easy to be big, but being the best requires daily dedication—and we have that dedication, with a goal that’s perfectly aligned with yours.