Insurance Commissioner Lara Extends Insurance Cancelation Moratorium in Wildfire Areas

On Thursday, California Insurance Commissioner Ricardo Lara announced that, for the second year in a row, a one-year moratorium would be placed on insurers from canceling or not-renewing homeowners policies in wildfire-affected ZIP codes.

Altogether, the announcement will affect 2.1 million homeowners throughout the state, in addition to the 364,000 homeowner policies that were protected in last years moratorium. Before the moratorium began in November of 2019, over 350,000 California residents had been dropped by insurance companies in wildfire affected areas because of the high-risk involved.

“Losing your insurance should be the last thing on someone’s mind after surviving a devastating fire,” explained Commissioner Lara in a statement Thursday. “My action gives millions of Californians breathing room and hits the pause button on insurance non-renewals while we take additional steps to expand our competitive market.”

Former wildfire victims, as well as residents who live in affected wildfire zones, applauded the renewal on Thursday, noting that it would help protect them for another year.

“We’ve had several wildfires sprout up this year,” said Diego de la Rosa, a San Diego County resident who nearly lost his home to a wildfire this year, in a Globe interview. “My house had two close calls, one within 1,000 feet. If I lost it and had no insurance, I would have had nothing. And now ‘m protected just in case next year is just as bad as this year.

“If anything, it’s peace of mind. It’s another protection for homeowners like me. It helps the little guy.”

Another affected resident, Diane Porter of Orange County, also agreed.

“They had to evacuate part of Irvine only a few weeks ago. My home was almost destroyed,” explained Porter. “Rich or poor, this absolutely made sense. You just can’t drop somebody for living in an area that was affected by an act of God.”

The two largest insurance trade groups in California, the American Property Casualty Insurance Association and the Personal Insurance Federation of California, also agreed with the Department of Insurance on Thursday in a joint statement. They said the move was anticipated, but also necessary.

“We agree with the Commissioner that this is a shared responsibility, which means everyone plays a part,” said the two groups. “We hope to work collaboratively on comprehensive solutions to better account for increased wildfire risk in homeowners coverage, which will increase availability of insurance.

While changing the trajectory of climate change will take time, we need to take action now to make our communities more resilient and protect the lives and property of all Californians. This includes making sure homeowners have access to comprehensive insurance. It is important that we work together on solutions that increase insurance availability in high-fire risk areas and protect against insurer insolvency.”

Homeowners who are unsure if their ZIP code is protected can go to the Department of Insurance website to check to see if their policy is covered by the extended moratorium.