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Legal Alert

California Insurance Commissioner Issues Moratorium on Insurance Non-Renewals and Cancellations

California Insurance Commissioner Issues Moratorium on Insurance Non-Renewals and Cancellations

We know the ongoing wildfires in the Los Angeles region have deeply impacted many. Along with such loss brings the question of insurance coverage for the homes and property impacted by the fires. In response, California Insurance Commissioner Ricardo Lara recently issued a mandatory one-year moratorium on insurance non-renewals and cancellations.1 The moratorium shields policyholders within the fires perimeters and ZIP codes of the Palisades and Eaton fires by prohibiting homeowners insurance cancellations and non-renewals based solely on the fact that the insured structure is within an area where a wildfire has occurred.

The impacted ZIP codes include:

Palisades Fire:
90049, 90265, 90272, 90290, 90402, 91301, 91302, 91320, 91356, 91361, 91364, 91436

Eaton Fire:
91001, 91006, 91007, 91011, 91016, 91020, 91024, 91042, 91101, 91103, 91104, 91106, 91107, 91108, 91206, 91208, 91214, 91706, 91731, 91732, 91775, 91780, 93563

Specifically, the bulletin prohibits homeowner insurance companies from canceling or non-renewing residential insurance policies in above ZIP codes for one year from the Governor’s January 7, 2025 emergency declaration, regardless of whether the policyholder suffered a loss. Additionally, insurers must offer to rescind any notices of cancellation or non-renewal issued due to wildfire risk since the Governor’s January 7, 2025 emergency declaration, and offer to reinstate or renew policies in effect at the time of the applicable emergency declaration.

Commissioner Lara also urged insurers to forego any pending non-renewals and cancellations for policyholders more broadly impacted by the wildfires, but not necessarily within the designated ZIP codes. Though not binding on insurers, the Commissioner’s notice is in recognition of the vast impact of wildfires on the insurance market as a whole, and is intended to bring broader stability to the policyholders of the region.

Importantly, as firefighters continue to battle wildfires across the region, the Department of Insurance may issue a supplemental bulletin if additional ZIP Codes are determined to be within or adjacent to a fire perimeter subject to the declared state of emergency for Los Angeles and Ventura counties.

Links

Full bulletin issued by the California Insurance Commissioner

Commissioner Lara’s additional guidance to insurers


1 Senate Bill 824 (Lara, Chapter 616, Statutes of 2018) Insurance Code section 675.1, subdivision (b)(1) 

For More Information, Please Contact:

Linda Klamm
Linda Klamm
Partner
Walnut Creek, CA
Miles Holden
Miles Holden
Partner
San Francisco, CA
Caitlin Rabiyan
Caitlin Rabiyan
Associate
Los Angeles, CA

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