SB547 - Commercial property insurance cancellation and nonrenewal.

Senate Bill No. 547 CHAPTER 544 An act to add Section 675.55 to the Insurance Code, relating to insurance. [ Approved by Governor October 10, 2025. Filed with Secretary of State October 10, 2025. ] LEGISLATIVE COUNSEL'S DIGEST SB 547, Pérez. Commercial property insurance cancellation and nonrenewal. Existing law generally regulates classes of insurance, including commercial property insurance. Existing law prohibits an insurer from canceling or refusing to renew a policy of residential property insurance for a property located in a ZIP Code within or adjacent to the fire perimeter for one year after the declaration of a state of emergency, if the cancellation or nonrenewal is based solely on the fact that the insured structure is located in an area in which a wildfire has occurred, except as specified. This bill would extend that prohibition against cancellation or nonrenewal and its exceptions to a policy of commercial property insurance, except as specified. Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO Bill Text The people of the State of California do enact as follows: SECTION 1. Section 675.55 is added to the Insurance Code, to read: 675.55. (a) (1) An insurer shall not cancel or refuse to renew a policy of commercial property insurance for a property located in any ZIP Code within or adjacent to the fire perimeter, for one year after the declaration of a state of emergency, as defined in Section 8558 of the Government Code, based solely on the fact that the insured structure is located in an area in which a wildfire has occurred. This prohibition applies to all policies of commercial property insurance in effect at the time of the declared emergency. (2) For the purposes of this section, the fire perimeter shall be determined by the Department of Forestry and Fire Protection in consultation with the Office of Emergency Services. The department shall provide the commissioner with data describing the fire perimeter sufficient for the commissioner to determine which ZIP Codes are within or adjacent to the fire perimeter. The commissioner shall then issue a bulletin to inform insurers which ZIP Codes are subject to this subdivision. (b) Subdivision (a) does not apply in any of the following circumstances: (1) If willful or grossly negligent acts or omissions by the named insured, or the named insured’s representatives, are discovered that materially increase any of the risks insured against. (2) If losses unrelated to the postdisaster loss condition of the property have occurred that would collectively render the risk ineligible for renewal. (3) If there are physical or risk changes to the insured property beyond the catastrophe-damaged condition of the structures and surface landscape that result in the property becoming uninsurable. (c) (1) For the purposes of this section, “policy of commercial property insurance” is a policy subject to Section 675.5. (2) For purposes of this section, a “policy of commercial property insurance” does not include either of the following: (A) Policies that are inland marine, transit, or transportation insurance, including commercial automobile insurance. (B) A policy of commercial property insurance with an annual premium of twenty-five thousand dollars ($25,000) or more and the insured employed at least 25 employees on average during the prior 12 months. (d) Notwithstanding subparagraph (B) of paragraph (2) of subdivision (c), this section shall apply to a policy of commercial property insurance that insures against loss of, or damage to, real property, used primarily for commercial residential or habitational purposes, including, but not limited to, policies insuring all of the following: (1) Homeowners associations. (2) Condominium associations. (3) Long-term rental hotels or motels. (4) Apartment complexes. (5) Condominium complexes. (6) Multifamily dwellings with greater than five units. (7) Student housing. (8) Senior living facilities.