Newsom: Homeowners should benefit from interest on insurance payouts

Governor Gavin Newsom plans to sponsor a bill ensuring homeowners benefit from interest on insurance payouts for destroyed properties in the wake of the Palisades and Eaton fires in Los Angeles. The bill, to be introduced by Assemblymember John Harabedian, aims to provide homeowners with interest earned while insurance funds sit in escrow during rebuilding. Current California law requires lenders to pay interest on escrowed funds for property taxes and insurance but not for insurance payouts, which could amount to $20,000 annually for a $1-million payout for a destroyed home.

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