What AB 2038 does
An act to amend Section 675.1 of the Insurance Code, relating to insurance.
Existing law generally regulates classes of insurance, including residential property insurance. Existing law requires an insurer, in the case of a total loss to the primary insured structure under a policy of residential property insurance, for at least the next two annual renewal periods, but no less than 24 months of coverage from the date of the loss, to renew the policy under certain circumstances, including that the total loss to the primary insured structure was caused by a disaster. 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 a 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.
This bill would instead require an insurer to renew the policy of residential property insurance, under the above-described circumstances, for at least the next three annual renewal periods, but no less than 36 months of coverage from the date of the loss. The bill would also prohibit 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 a fire perimeter for two years after the declaration of a state of emergency.
Summary from the Legislative Counsel's Digest of the enrolled text, August 30, 2026. Read the full text on leginfo.
How it got here
Assemblymember Harabedian introduced AB 2038 on February 17, 2026. The text was amended 1 time, and heard in 5 committee hearings before its final floor votes.
- Assembly Floor, May 11, 2026: 53 ayes, 9 noes.
- Senate Floor, August 26, 2026: 28 ayes, 5 noes.
Committee votes along the way:
- Assembly Insurance, April 15, 2026: Do pass and be re-referred to the Committee on [Appropriations], 13-3.
- Assembly Appropriations, April 29, 2026: Do pass., 10-1.
- Senate Insurance, June 10, 2026: Do pass, but first be re-referred to the Committee on [Appropriations], 4-0.
- Senate Appropriations, June 29, 2026: Placed on suspense file, 7-0.
- Senate Appropriations, August 13, 2026: Do pass, 6-1.
Who supports and opposes AB 2038
The Senate Floor Analyses analysis dated August 15, 2026 lists 13 organizations in support and 4 in opposition. When Assembly Insurance first listed positions on April 14, 2026, the count was 5 in support and 4 opposed. By the Senate Floor Analyses analysis of August 15, 2026 it was 13 to 4.
In support: Insurance Commissioner Ricardo Lara / California Department of Insurance; California Community Foundation; Consumer Attorneys of California; Consumer Federation of America; Consumer Federation of California; Consumer Watchdog; Courage California; Extreme Weather Survivors Action Fund; and 5 more.
Opposed: American Property Casualty Insurance Association; National Association of Mutual Insurance Companies; Pacific Association of Domestic Insurance Companies; Personal Insurance Federation of California.
Read the Senate Floor Analyses analysis.
What happens next
It reached the Governor's desk on September 3, 2026. Bills presented after the Legislature adjourned on August 31 must be signed or vetoed within thirty days.
The Governor can sign the bill, veto it, or let it become law without a signature. Until the decision, sign and veto request letters are the remaining channel, and the Department of Finance's enrolled bill report carries weight on anything with a fiscal effect. If signed, most provisions take effect January 1, and implementation moves to the agencies named in the bill.
What it means for financial services organizations
Two decisions follow from a bill at this stage. The first is whether to weigh in with the Governor's office before the thirty-day window closes. The second is how to prepare for implementation if it becomes law: which agency writes the rules, when the comment period opens, and which obligations begin January 1.
The financial services group at Capitol Axis handles that for financial services clients.
Questions about AB 2038
What does AB 2038 do?
This bill would instead require an insurer to renew the policy of residential property insurance, under the above-described circumstances, for at least the next three annual renewal periods, but no less than 36 months of coverage from the date of the loss. The bill would also prohibit 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 a fire perimeter for two years after the declaration of a state of emergency.
Has AB 2038 passed the California Legislature?
It reached the Governor's desk on September 3, 2026. Bills presented after the Legislature adjourned on August 31 must be signed or vetoed within thirty days.
Who supports and opposes AB 2038?
The Senate Floor Analyses analysis dated August 15, 2026 lists 13 organizations in support and 4 in opposition. Supporters include Insurance Commissioner Ricardo Lara / California Department of Insurance; California Community Foundation; Consumer Attorneys of California. Opponents include American Property Casualty Insurance Association; National Association of Mutual Insurance Companies; Pacific Association of Domestic Insurance Companies.
What happens next with AB 2038?
The Governor can sign it, veto it, or let it become law without a signature. Until then, sign and veto request letters are the remaining channel, and the Department of Finance's enrolled bill report carries weight on anything with a fiscal effect.