Mandatory one-year moratorium prevents homeowners insurance cancellations and non-renewals

November 9, 2024 - SACRAMENTO, Calif. — Insurance Commissioner Ricardo Lara has issued a mandatory one-year moratorium on insurance companies to preserve residential insurance coverage for more than 11,000 policyholders affected by the Shelly Fire located in Siskiyou County and the Bear Fire located in Sierra County. The Commissioner’s Bulletin shields those living within the perimeters or adjoining ZIP Codes of this fire from insurance non-renewal or cancellation for one year from the date of the Governor’s emergency declarations regardless of whether they suffered a loss.

“My moratorium will ensure that homeowners have the peace of mind knowing their insurance coverage remains intact,” said Commissioner Lara. “Safeguarding wildfire survivors from non-renewals is crucial as we tackle the challenges posed by climate change and work toward lasting reforms to stabilize our state’s insurance market.”

Commissioner Lara’s ability to issue these moratoriums is a result of a California law that he authored in 2018 while serving as a state senator in order to provide temporary relief from insurance non-renewals and cancellations to residents living within or adjacent to a gubernatorial-declared wildfire disaster.

Thus far in 2024, approximately 1,000,000 policies are protected for one year. Today’s order protects over 11,000 policyholders for one year, effective November 1, 2024. Consumers who were non-renewed prior to the emergency declaration date and are unable to obtain insurance or are dissatisfied with their current coverage should contact the Department of Insurance for assistance in shopping for insurance.

Consumers can go to the Department of Insurance website to see if their ZIP Code is included in the moratorium. Consumers should contact the Department of Insurance at 800-927-4357 or via chat or email at insurance.ca.gov if they believe their insurance company is in violation of this law, or have additional claims-related questions.

Since taking office in 2019, Commissioner Lara has done the following major wildfire-related actions:

• Announced his Sustainable Insurance Strategy, the largest insurance reform in 30 years, which includes multiple executive actions aimed at improving insurance choices and protecting Californians from increasing climate threats while addressing the long-term sustainability of the nation’s largest insurance market.
• Modernized and improved the California FAIR Plan, the insurer of last resort. Commissioner Lara’s plan offers homeowners and condo associations and business owners expanded coverage in a new “high-value” plan with limits up to $20 million per building, a sound financial formula to protect policyholders in extreme loss scenarios, and improved transparency by requiring increased public reporting on FAIR Plan activity and customer service metrics. Commissioner Lara previously raised residential and commercial coverage limits for the first time in 25 years to keep pace with increased costs.
• Released his catastrophe modeling regulation that will help restore options for all Californians. His proposed regulation will have major benefits for Californians in the form of more reliable rates, greater availability of insurance, stronger oversight, and safer communities.
• Announced “Safer from Wildfires,” a new insurance framework that incorporates wildfire safety measures to help save lives while making homes and businesses more resilient. Safer from Wildfires was created by a first-ever partnership between the Department of Insurance and the emergency and preparedness agencies in the Governor’s Administration, including CAL FIRE, the Governor’s Office of Emergency Services (CalOES), the Governor’s Office of Planning and Research, and the California Public Utilities Commission.
• Finalized new regulations to incorporate Safer from Wildfires in insurance pricing, driving down costs for consumers who have taken actions to protect their communities while increasing transparency about their home’s or business’s “wildfire risk score.”
• Sponsored new insurance protections signed into law by the Governor — despite opposition from insurance companies — that will mean larger payouts for some claims, less red tape from insurance companies, and more help for people under evacuation orders.

Following the Governor’s state of emergency declarations, the Department of Insurance partners with CAL FIRE and CalOES, pursuant to existing statute, to identify wildfire perimeters for mandatory moratorium areas. The Department of Insurance will continue to collaborate with CAL FIRE and CalOES to identify additional wildfire perimeters for any fires where the Governor declares a state of emergency.

Notes:

• Link to Commissioner’s Bulletin 
• On November 1, 2024, Governor Gavin Newsom proclaimed a state of emergency in Siskiyou County due to the Shelly Fire and a state of emergency in Sierra County due to the Bear Fire.
• While existing law prevents non-renewals and cancellations for those who suffer a total loss in areas subject to a declared disaster, the 2018 law established protection for those living within or adjacent to a declared wildfire emergency whether they suffer a loss or not — recognizing for the first time in law the disruption that non-renewals cause in communities following wildfire disasters. Homeowners who suffered a total property loss have up to 24 months of protection from non-renewal or cancellation.
• Consumers can go to the Department of Insurance website to find the Commissioner’s Bulletin to see if their ZIP Code is included in this moratorium.
  Source: CA. Dept. of Ins.