California’s New Insurance Reform: What Homeowners Need to Know About Personal Injury Coverage

If you own a home in California, big changes are underway for your insurance, changes that could directly impact your family’s finances and your protection after an accident.

Wildfires, inflation, and insurance company pullbacks have rattled California homeowners for years. Now, new state laws bring both hope for a sturdier insurance system, and important changes every homeowner needs to review, especially when it comes to personal injury liability.

This month, Governor Gavin Newsom signed a bipartisan package of bills designed to strengthen California’s home insurance market and overhaul the state’s “insurer of last resort,” the FAIR Plan. What’s changing in California home insurance? In the face of climate-driven wildfires and an insurance market on shaky ground, the new reforms aim to:

• Give the FAIR Plan, the backstop policy provider for homeowners who can’t get insurance elsewhere, more funding, modernized oversight, and improved customer service.​
• Require insurers and the state to regularly review wildfire risk and mitigation (every five years), incentivizing “home hardening” measures to keep properties eligible and affordable.​
• Make it easier and faster to pay claims to policyholders after disasters, reducing red tape and payment delays.
• Bring parity for manufactured home coverage and expand protection for underinsured properties.
• Encourage more carriers to return to the market, with the long-term goal of restoring access to robust, affordable home insurance for all residents.​

Many California homeowners may not realize that home insurance doesn’t just cover fires and theft, it also protects you from personal liability if someone is injured on your property. With insurers tightening policies and new state-mandated changes rolling out, it’s more important than ever to:

• Review your homeowner’s policy: Policies often include “personal liability” and “medical payments to others.” If a guest trips on your steps or a child is hurt in your yard, this coverage can pay for their medical bills or any lawsuit against you.
• Understand coverage limits: The standard $100,000 minimum personal liability might not be enough if a serious injury occurs, or if there’s a legal claim involving multiple people. Consider raising your liability limit to $300,000 or even $500,000, especially if you own a pool, dog, or host frequent visitors.
• Be aware of exclusions and requirements: Some high-risk features (like trampolines or certain dog breeds) may be excluded. New laws may affect how and if your home remains covered, so take steps to “harden” your home and reduce risk.
• Actively document injuries and hazards: Clear hazards, and keep records and photos of any safety improvements. It can help to prevent a claim—or support you if one arises.

These new reforms come as California also increases minimum liability requirements on auto insurance, meaning more funds will be available to accident victims and more protection for policyholders facing personal injury claims. Expect insurers to adjust their policies, rates, and claim handling as they comply with both wildfire-specific reforms and higher general liability standards.​

“After years of heartbreak for families forced out by fire or hit with uncovered claims, Californians deserve insurance that works, covering not just our property, but our people and their futures,” said Chris Hagan, partner and attorney at the Law Office of Chain | Cohn | Clark. “Every family should double-check their liability coverage as these reforms roll out. The true test of an insurance policy is whether it’s there when you need it most.”

Hagan added: “Stay informed and proactive. Review your insurance with your agent, raise personal liability limits if possible, and keep your home as safe as can be.”

HOMEOWNERS INSURANCE IN CALIFORNIA

Homeowners insurance in California can provide key protection for personal injury incidents that occur in or around your home. This coverage is divided into two main sections: personal liability coverage and medical payments coverage (“MedPay”).​

Personal Liability Coverage pays for legal costs, medical expenses, and damages if you (the homeowner) or a resident are found legally responsible for causing injury to others on your property or, in some cases, off your property (such as with a dog bite at the park).​ It covers a broad range of claims: slip and fall accidents, dog bites (California is a strict liability state for dog bites), accidental injuries, and even wrongful death lawsuits. Most policies start at $100,000 coverage but experts recommend at least $300,000 to $500,000, especially if you have a pool, host frequent visitors, or other higher risk features. Coverage applies only when the homeowner is found negligent. If the incident happened without any homeowner fault (example: guest trips on perfectly maintained stairs), the insurer may deny liability.​

Medical Payments Coverage (MedPay) pays for medical expenses if someone is injured on your property, regardless of fault, often up to $5,000, much less than the personal liability limit.​ It’s designed to provide a quick, “goodwill” payment for minor injuries, covering ambulance fees, stitches, X-rays, etc. It helps resolve smaller incidents without lengthy legal disputes.​ If the injury is severe or the guest sues, the claim will convert to a liability claim and your higher limits apply.

Here are some examples of what can be covered:

• Slip and fall incidents, including those involving postal workers or delivery drivers.​
• Dog bites in the home or sometimes even off the property.
• Injuries due to property hazards (unmaintained walkways, broken steps, unsafe pool areas).
• Injuries to children or other guests in the yard, at a party, or inside the home.

And here are some possible exclusions and limits:

• Intentional acts of harm and certain risky activities may not be covered.
• Some policies exclude specific dog breeds or trampolines.
• There are maximums for both MedPay and personal liability limits. Anything above those limits must be paid out of pocket.
• Homeowners insurance generally does not cover injuries to household members or injuries arising from business activities conducted at the home.

If you or someone is injured on a property, here is how you can use your home insurance for personal injury:

1. Document the Incident: Take photos, gather witness statements, report the injury promptly to your insurance agent.​
2. Medical Treatment: Encourage the injured party to get immediate care. Provide information on your policy if they may need to file a claim.
3. Contact Your Insurer: Whether a MedPay or full liability claim, coordinate with your agent and provide all requested evidence.
4. Settlement/Legal Matters: The insurer will investigate, negotiate settlements, or provide legal defense if a lawsuit follows.

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If you or someone you know is injured in an accident at the fault of someone else, or injured on the job no matter whose fault it is, contact the attorneys at Chain | Cohn | Clark by calling (661) 323-4000, or fill out a free consultation form, text, or chat with us at chainlaw.com.