California Insurers Blocked From Dropping Customers In 2019 Wildfire Zones

It’ll be a lot harder for insurance companies to drop homeowners who live in California communities prone to wildfires.

On Thursday, the state’s Insurance Commissioner issued a one-year moratorium, which prevents companies from kicking customers who live in areas affected by wildfires of their rolls. 

Ricardo Lara's order covers ZIP codes either inside or next to the perimeter of 16 wildfires from 2019, where Gov. Gavin Newsom declared a state of emergency. 

Lara authored a law while in the Legislature that allows such a moratorium to be put in place, but it only took effect in January, so the one he just issued doesn’t cover victims of wildfires in 2017 or 2018.

The insurance commissioner says that, since 2015, insurance companies have declined to renew nearly 350,000 policies in high-risk areas. That data does not include information on how many people were able to find coverage elsewhere or at what price.

The commissioner also called on companies to do more on their own. "I am asking insurers to extend a voluntary moratorium on non-renewals due to wildfire risk for homeowners, renters, and businesses anywhere in the state through December 5, 2020, because I believe everyone in the state deserves this same breathing room,” Lara said.

Insurance industry officials say companies have no other choice than to cancel policies following several years of wildfires in which they had to pay out billions of dollars in claims.