Insurance: residential and commercial.

Assembly Member DeMaio's residential insurance reform package proposes state coverage of certain premium increases while eliminating taxes on residential property policies through 2030. The legislation would require California to pay for annual residential property insurance rate increases that exceed either 7% or the national average increase, whichever is lower, contingent upon appropriation of funds.

The Department of Insurance must deliver a comprehensive report to the Legislature by March 31, 2026, developed in consultation with insurers. This report will examine potential regulatory changes to maintain rate increases at or below national averages, outline a $4 billion fire fuel reduction strategy over four years, and identify regulations affecting defensible space and brush management that could be suspended or reformed. The bill also directs the governor to pursue discussions with federal officials regarding a national reinsurance relief program.

Under the tax provisions, premiums received for residential property insurance policies would be exempt from the state's 2.35% gross premiums tax beginning January 1, 2026. The legislation includes a sunset clause that would terminate all provisions on January 1, 2030, reverting tax rates and premium increase policies to their previous status unless extended by future legislation.