California Halts Insurance Cancellations After Wildfires

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Key Points​

• California has implemented a one-year moratorium preventing insurance companies from canceling or non-renewing homeowners’ policies in areas impacted by wildfires.
• The moratorium applies to ZIP Codes near the Palisades and Eaton fires, covering Los Angeles and Ventura Counties under a state of emergency declared on January 7.
• Additional protections include extended grace periods for premium payments and resources for policyholders navigating claims.

In response to the devastating impact of the Palisades and Eaton wildfires, California Insurance Commissioner Ricardo Lara has issued a mandatory one-year moratorium on insurance non-renewals and cancellations for homeowners in fire-affected areas. This move aims to stabilize communities already grappling with the challenges of wildfire recovery.

“This measure ensures residents in these impacted areas are not burdened with the additional stress of finding new insurance during an already difficult time,” said Commissioner Lara.

The moratorium extends to residents in ZIP Codes directly within or adjacent to the fire perimeters. The Department of Insurance has emphasized that this protection applies regardless of whether homeowners experienced losses due to the fires.

Impact Of Wildfires On Homeowners Insurance​

Wildfires have become an increasingly pressing issue for homeowners in fire-prone regions, dramatically altering the landscape of insurance coverage. As these disasters grow more frequent and severe, insurance companies face mounting financial losses, prompting shifts in how policies are issued, priced, and renewed.

One of the most significant impacts of wildfires is the rise in insurance premiums. In high-risk areas, homeowners are often faced with steep increases in costs as insurers adjust to the growing likelihood of wildfire-related claims. For some, coverage may become prohibitively expensive, forcing homeowners to turn to state-run programs or bare-bones policies that provide limited protection.

Non-renewals are another growing concern. Insurers increasingly choose not to renew policies in areas deemed too risky, leaving homeowners scrambling to find new coverage. This can result in gaps in protection during critical times.

Additionally, policy terms have become stricter. Many insurers now require homeowners to take fire mitigation measures, such as clearing brush or using fire-resistant building materials, to qualify for or maintain coverage.

Wildfires also create challenges during the claims process. Homeowners may face delays or disputes over payouts, adding stress during an already difficult time. As wildfires reshape the insurance industry, homeowners are left navigating a complex and evolving landscape.

Related: Do You Need Earthquake Insurance?

Focus On Insurance Companies​

Beyond the moratorium, Commissioner Lara has called on insurers to pause pending non-renewals and cancellations for properties near wildfires for six months. The Commissioner also urged companies to extend the legally required 60-day grace period for premium payments, recognizing the financial strain on affected families.

The Department of Insurance is hosting workshops to assist policyholders in understanding their coverage and filing claims. These sessions aim to support those navigating complex insurance processes while providing resources for rebuilding and recovery.

Residents can check if their ZIP Code qualifies for the moratorium on the Department’s website. Those experiencing issues with their insurance companies are encouraged to report violations or seek assistance by contacting the Department directly.

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What Homeowners Can Do​

The best thing homeowners and residents can do is be prepared for an emergency. This means being ready to evacuate if needed, insuring that your insurance records are up to date, and making sure you are aware of any incidents in your area.

As California continues to combat the increasing frequency of wildfires, efforts like these highlight the importance of safeguarding homeowners against compounding hardships.

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Editor: Colin Graves


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