One Year Moratorium on Wildfire Insurance Doesn’t Solve The Problem

In the world of politics there is a phrase called `kicking the can down the road,’ which means putting off a difficult decision since you don’t want the pushback from angry voters. Taking the decision to force insurers to offer cover in high risk areas for an extra year might placate voters, but it won’t end well. In fact it’s likely to leave the State of California as the insurer of last resort as regards wildfires. Here’s the word;

Insurance Commissioner Ricardo Lara issued a mandatory one-year moratorium on insurance companies to preserve residential insurance coverage for more than 185,000 policyholders affected by the Park, Borel, and Gold Complex fires. The Commissioner’s Bulletin shields those living within the perimeters or adjoining ZIP Codes of these fires 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.

“Homeowners plagued by devastating wildfires deserve the peace of mind that their home and future will remain covered by insurance as they recover and rebuild,” said Insurance Commissioner Ricardo Lara. “Protecting wildfire survivors from non-renewals is one of the many actions I am taking to implement proactive solutions that address the impacts of climate change and extreme wildfires on our communities.”

The Department of Insurance is deploying staff to wildfire disaster areas to assist survivors in filing claims and protect communities from potential insurance fraud and abuse. Consumer services experts are available in-person to answer questions at Local Assistance Centers and enforcement officers are on the ground in areas near the Park Fire, meeting with residents and coordinating with local law enforcement.

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.

Since 2019, Commissioner Lara’s actions have protected nearly 4 million homeowners. Today’s order protects over 185,000 policyholders for one year, effective July 26, 2024, for the Park and Gold Complex Fires and July 30, 2024, for the Borel Fire. 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.