California fire insurance policies must provide an insured a minimum of 12 months from the “inception of the loss” to bring any “suit or action on the policy for recovery of any claim.” Cal. Ins. Code § 2071. In 2024, the California Supreme Court interpreted this to include causes action for breach of contract and breach of the covenant of good faith and fair dealing, but not a cause of action under California’s Unfair Competition Law seeking declaratory and injunctive relief, which has a four-year statute of limitations. Rosenberg-Wohl v. State Farm Fire & Cas. Co., 16 Cal. 5th 520, 537 (2024). For a loss occurring during a State of Emergency, the time is extended to 24 months. Cal. Ins. Code § 2071.
The applicable time to file suit starts running at the “inception of the loss.” Id. It is “equitably tolled,” meaning “paused,” once the claim is submitted. Prudential-LMI Com. Insurance v. Superior Court, 51 Cal.3d 674, 687 (1990). The adjustment ends when the insurer “unequivocally” denies the claim, in whole or in part. Singh v. Allstate Ins. Co., 63 Cal. App. 4th 135, 140 (1998). An insurer’s reconsideration of a denial does not reopen the statute of limitations. Id. Equitable tolling is a case law principle and is not found in any statutes or regulations.
Insurers are required to actively alert insureds to any applicable statutes of limitations at least 60 days in advance. 10 Cal. Code Regs. § 2695.7(f). Failure to comply further tolls the statute of limitations until 30 days after notice is actually provided. Cal. Ins. Code § 2070.1. Failure to notify the insured prevents the insurer from asserting the defense. Spray, Gould & Bowers v. Associated Internat. Ins. Co., 71 Cal. App. 4th 1260, 1269 (1999).
