CA Moratorium Bans Non-Renewal Of Insurance In Fire Areas

CALIFORNIA — Insurance Commissioner Ricardo Lara on Thursday issued a one-year mandatory moratorium that prohibits insurance companies from not renewing the policies of more than 800,000 policyholders living in wildfire-impacted areas of Northern and Southern California.

The moratorium is the result of Senate Bill 824, authored last year by Lara when he was a state senator. The law that took effect in January gives temporary relief from non-renewals of insurance to residents living near a declared wildfire disaster.

Lara said the homeowner insurance crisis extends beyond the wildfire perimeters and impacts residents statewide. He called on insurance companies to voluntarily cease all non-renewals related to wildfire risk statewide until Dec. 5, 2020, in the wake of Gov. Gavin Newsom's October declaration of a statewide emergency due to fires and extreme conditions.

"I am calling on insurance companies to push the pause button on issuing non-renewals for one year to give breathing room to communities and homeowners while they adapt and mitigate risks, give the Legislature time to work on additional lasting solutions and allow California's insurance market to stabilize," Lara said in a news release.

The moratorium covers more than 800,000 residential policies in ZIP codes adjacent to recent wildfire disasters under SB 824, also known as the Wildfire Safety and Recovery Act.

The Department of Insurance, Cal Fire and Newsom's office identified wildfire perimeters and adjacent ZIP codes within the mandatory moratorium area. Lara's moratorium announced Thursday includes seven of the 16 wildfires within state-declared emergency areas.

Under the Governor’s Oct. 25, 2019, Declaration, insurers shall not cancel or non-renew for one year policies of residential property insurance due to wildfire risk in the following ZIP Codes related to the Kincade Fire: 95403, 95404, 95492, 95448, 95425, 94515, 95461, 95441, 94928, 95401, 95409, 95407, 95405, 95451, 94574, 95446, 95436, 95467, 95457, 95442, 94951, 95445, 95421, 94508, 95449, 95452, 95439, 94567, and 94576.

Cal Fire is identifying the perimeters of the remaining nine fires that will be announced in a separate news release.

Existing laws prevent insurance non-renewals for those who suffer a total loss, and the new law establishes protection for those living adjacent to a declared wildfire emergency who did not suffer a total loss.

The new law recognizes for the first time the disruption that non-renewals cause in communities following wildfire disasters, the Department of Insurance said.

Sonoma County Supervisor James Gore said the insurance companies are critical partners in helping the recovery of communities affected by the wildfires and natural disasters. The county witnessed wildfires in 2017 and in October of this year.

"The inability to obtain insurance after disaster strikes impacts home values and tax revenues for emergency services that help ensure the integrity of California communities," Gore said.

"Home insurance is not a luxury - it's a necessity. Yet for hundreds of thousands of Californians it's become almost impossible to find and afford," said Amy Bach, executive director of the nonprofit United Policyholders. "This puts people between a rock and a hard place, and communities up and down the state are hurting," Bach said.

Copyright © 2019 by Bay City News, Inc. — Republication, Rebroadcast or any other Reuse without the express written consent of Bay City News, Inc. is prohibited.