Summary of California Fair Claims Settlement Practices Regulations

Summary of each applicable section

1. These regulations apply to home protection contracts and home protection companies defined in the California Insurance Codes Section 12740.
   

1. Our claim files are subject to an examination by the Department of Insurance (DOI). The claim files should contain all documents, notes, and work papers (including copies of correspondence) so that the department can reconstruct our actions as to how we handled the claim.
   
2. We must keep our claim files, either by hard copy or electronically, for a minimum of four years.
   
3. Failure to comply with this section will require us to provide the DOI a plan of how to comply with this in the future.
   

1. We Cannot:
   
1. Misrepresent our warranty or the statutes and regulations that apply to a claim.
   
2. Deny coverage if we are denied access to the home unless there is documentation in our file showing our demand and the homeowner's refusal or if the homeowner breaches any part of our warranty by not allowing us access to the home.
   
3. Put a restriction on the homeowner regarding a time limit to file a claim.
   
4. Have a homeowner sign a release that extends beyond the subject matter of the claim, including but not limited to waiving the provisions of the California Civil Code, unless we explain in detail in writing first.
   
5. Issue checks to homeowners with our release language on the back of the check.
   

1. We shall respond to any Department of Insurance (DOI) inquiries within 21 calendar days of our receipt. In that response we shall furnish to the DOI a complete written response based on the facts, as we know them. The response shall also include copies of any documentation and the claim files requested by the DOI.
   
2. We shall respond to any consumer claim inquiry within 15 calendar days of our receipt and furnish the consumer a complete response.
   
3. Upon receiving a claim, we shall do the following within 15 calendar days:
   
1. Acknowledge receipt of such claim either in writing or by telephone, 
   
2. Provide claimant forms, instructions, and/or assistance,
   
3. Begin any necessary investigation of the claim.
   

1. Every insurer shall adopt and communicate to all its claims agents written standards for the prompt investigation and processing of claims and shall do so within ninety (90) days after the effective date of these regulations or any revisions thereto.
   
2. All licensees shall provide thorough and adequate training regarding the regulations to all their claims agents. Licensees shall certify that their claims agents have been trained regarding these regulations and any revisions thereto. However, licensees need not provide such training or certification to duly licensed attorneys. A licensee shall demonstrate compliance with the subsection by the following methods:
   
1. Where the licensee is an individual, the licensee shall annually certify in writing under penalty of perjury that he or she has read and understands the regulations and any and all amendments thereto;
   
2. Where the licensee is an entity, the annual written certification shall be executed, under penalty of perjury, by a principal of the entity as follows:
   
1. That the licensee's claims adjusting manual contains a copy of these regulations and all amendments thereto; and
   
2. That clear written instructions regarding the procedures to be followed to effect proper compliance with the subchapter were provided to all its claims agents.
   
3. Where the licensee retains insurance adjusters as defined in California Insurance Code Section 14021 , the licensee must provide training to the insurance adjusters regarding these regulations and annually certify, in a declaration executed under penalty of perjury, that such training is provided. Alternately, the insurance adjuster may annually certify in writing, under penalty of perjury, that he or she has read and understands these regulations and all amendments thereto or has successfully completed a training seminar which explains these regulations
   
4. A copy of the certification is required by Subsections 2695.6(b)(1), (2), or (3) shall be maintained at all times at the principal place of business of the licensee, to be provided to the commissioner only upon receipt.
   
5. The annual certification required by this subsection shall be completed on or before September 1 of each calendar year.
   

Full Document

View attachment for full California Fair Claims Settlement Practices Regulations.