Newsom: owners should benefit from interest in insurance payments

While Los Angeles turns out to devastate Eaton palisades and fires, Governor Gavin Newsom plans to sponsor a bill which would guarantee that the owners, not lenders, benefit from interests won over payments of Insurance for destroyed or damaged properties, according to his office.

“The reconstruction of the owners after a disaster needs all the support they can obtain, including the interests gained in their insurance funds,” Newsom said in a statement announcing the planned bill.

The state bill will be written by the member of the John Harabedian (D-Pasadena) assembly. A spokesperson for the Newsom office said the bill should be presented by the end of the month.

Insurance payments can accumulate significant interests while money is in the whole during reconstruction, according to supporters of invoices. California’s law already obliges lenders to pay the owners with interests on the entire funds for land taxes and insurance, but not for insurance payments held in full, according to the Governor’s office.

A spokesperson for the Newsom office said that interest rates were generally about 2% per year, which would represent around $ 20,000 per year for a payment of $ 1 million for a destroyed house.