California’s insurance commissioner on Friday issued a one-year moratorium that bars insurers from canceling or not renewing homeowner policies in Los Angeles County areas ravaged by recent wildfires.
The order by Insurance Commissioner Ricardo Lara protects homeowners inside the perimeters or adjoining ZIP codes of the Palisades and Eaton fires burning in Los Angeles County following Democrat Gov. Gavin Newsom’s emergency declaration Wednesday, regardless of loss, The Los Angeles Times reported.
“Losing your insurance should be the last thing on someone’s mind after surviving a devastating fire,” Lara said in a news release. “This law gives millions of Californians breathing room and hits the pause button on insurance non-renewals while people recover.”
Such moratoriums are provided for under state law and are typically issued after large fires. They apply to all policy holders regardless of whether they have suffered a loss.
Lara also urged insurers to pause for six months any pending nonrenewals or cancellations that were issued up to 90 days before Newsom’s emergency declaration that were to take effect after the start of the fires — something he does not have authority to prohibit, according to the Times.
“I call upon all property insurance companies to halt these nonrenewals and cancellations and provide essential stability for our communities, allowing consumers to focus on what’s important at the moment — their safety and recovery,” Lara said Friday during a news conference in downtown Los Angeles.
He further asked insurers to extend to policyholders affected by the fires time to pay their premiums that go beyond the existing 60-day grace period that is mandatory under state law.
As of Friday, the wildfires have killed at least 10 people, destroyed more than 10,000 private homes and businesses and torched more than 36,000 acres in and around Los Angeles.
The Pacific Palisades fire is considered the most destructive in Los Angeles history; as of Friday morning, it had grown to more than 20,000 acres, the Times reported, burning more than 5,000 homes, businesses, and other buildings. It was just 6% contained. The Eaton fire, which has burned many structures in Altadena and Pasadena, has spread to nearly 14,000 acres and was 3% contained as of early Friday.
The moratorium comes just weeks after the Insurance Commission issued a new rule requiring private insurance firms to start writing new policies in high-risk areas if they wanted to keep doing business in the state but allowing them allowed to pass the costs on to their customers.
Insurers have dropped hundreds of thousands of policyholders across California in recent years, citing the increasing risk and severity of wildfires, according to the Times. The state’s Department of Insurance said residents living in fire zones can be subject to sudden non-renewals, prompting the need for moratoriums.
It’s not known how many homeowners in Pacific Palisades and elsewhere might not have had coverage, but many homeowners reported that insurers had not renewed their policies before the disaster struck, according to the Times. State Farm last year told the Department of Insurance it would not renew 1,626 policies in Pacific Palisades when they expired, starting last July.