California Home Insurer Allowed to Drop 1,300-Plus Policies in High Wildfire Risk Areas

A year after a series of wildfires ripped through the Los Angeles and San Diego metropolitan areas, one California home insurer has gotten the go-ahead to drop nearly 1,400 policies in areas with high wildfire risks.

On Jan. 3, state insurance regulators granted Standard Guaranty Insurance Company’s request to change eligibility rules for its First Select home insurance product. The change tightens the wildfire risk rating Standard Guaranty will treat as insurable under a First Select policy.

The move will “result in the non-renewal of 1,363 policies,” the insurer stated in the request it filed with the California Department of Insurance. The non-renewed policies represent roughly 72% of all the policies in the First Select program, the insurer stated.

Previously, homes with Verisk FireLine scores of 7 or higher weren’t eligible for coverage. Now, homes with FireLine scores of 3 or higher will be ineligible.

Verisk, the data analytics company that produces the wildfire scoring model, says its FireLine scores range from 0 (negligible risk) to 30 (extreme risk).

Where homeowners will have to seek new coverage

ZIP codes with the highest number of affected policyholders are largely in areas that CAL FIRE designates as High Fire Hazard Severity Zones. For example, Standard Guaranty plans to shed all its First Select policies in Big Bear Lake, which sits in the mountains of San Bernardino County, surrounded by the San Bernardino National Forest.

Communities in the San Bernardino Mountains will see the most non-renewals, including:

• Lake Arrowhead (100% non-renewal)

• Twin Peaks (100%)

• Running Springs(97.7%)

• Crestline(95.7%)

Other communities where First Select policies won’t renew include:

• Wrightwood in the San Gabriel Mountains (100%)

• Idyllwild in the San Jacinto Mountains (100%)

• Springville in the Sierra Foothills (100%)

• Chatsworth in the San Fernando Valley (100%)

• Encinitas in the coastal region of San Diego County (100%)

Insurer says it will follow one-year moratorium on non-renewals and cancellations

A 2018 state law bars home insurance companies from canceling or non-renewing coverage on affected homes for one year following a governor-declared wildfire emergency. California Insurance Commissioner Ricardo Lara invoked that law following the January 2025 Palisades, Eaton, Hughes, Hurst, Lidia, Sunset, and Woodley wildfires.

The protections expire one year after the governor declares a state of emergency — Jan. 7, 2026, for California homeowners affected by the 2025 wildfires in Los Angeles and Ventura counties.

In its state filing, Standard Guaranty stated it will abide by the moratorium as it issues non-renewals. None of the ZIP codes where the insurer intends to drop policies are in the state’s list of areas protected due to the January 2025 wildfires.

What’s next: 75 days’ notice for affected homeowners

Once affected First Select policyholders receive a non-renewal notice, they’ll have 75 days before their coverage ends, Standard Guaranty said in its state filing.

Sometimes, insurers provide policyholders with options that allow them to continue coverage, such as making risk-mitigation home improvements. Standard Guaranty won’t be providing that type of option, the insurer told regulators.

California’s average home insurance cost is below the national average, according to Insurify data. But premiums are rising due to severe weather events, like wildfires and flooding, as well as a regulatory environment that some insurers say they can’t profitably do business in.

Reform efforts from Lara’s insurance department have made some progress toward mitigating the state’s insurance crisis. Some large insurers that had either reduced their business in the state or left it altogether have begun selling policies in California again.