California Bars Home Insurers from Shedding Policies in Wildfire-Hit Areas

State insurance commissioner issues one-year moratorium that stops insurers from canceling or non-renewing policies in Southern California areas affected by wildfires.

Chris Schafer
Written byChris Schafer
Chris Schafer
Chris SchaferDeputy Managing Editor, News and Marketing Content
  • 15+ years in content creation

  • 7+ years in business and financial services content

Chris is a seasoned writer/editor with past experience across myriad industries, including insurance, SAS, finance, Medicare, logistics, marketing/advertising, and many more.

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Evelyn Pimplaskar
Evelyn PimplaskarEditor-in-Chief, Director of Content
  • 10+ years in insurance and personal finance content

  • 30+ years in media, PR, and content creation

Evelyn leads Insurify’s content team. She’s passionate about creating empowering content to help people transform their financial lives and make sound insurance-buying decisions.

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John Leach
Reviewed byJohn Leach
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John LeachSenior Insurance Copy Editor
  • Licensed property and casualty insurance agent

  • 8+ years editing experience

John leads Insurify’s copy desk, helping ensure the accuracy and readability of Insurify’s content. He’s a licensed agent specializing in home and car insurance topics.

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California home insurance policyholders in and around the areas of the Palisades and Eaton fires received some welcome news from the state’s department of insurance last week.

Insurance Commissioner Ricardo Lara issued a one-year moratorium on home insurance policy cancellations and non-renewals for those living in the Palisades and Eaton fire areas or in surrounding ZIP codes affected by the ongoing wildfires. The commissioner is also asking insurers to suspend any policy cancellations or non-renewals that homeowners received before the fires started.

“This means that if you received a non-renewal from your homeowner’s insurance between Oct. 9 and Jan. 7, essentially 90 days, your insurance company should do the right thing and retain you as a valued policyholder,” Lara stated.

The moratorium comes on the heels of Gov. Gavin Newsom’s declaration of emergency Jan. 7.

California’s challenging insurance environment

California has long been a mixed bag for insurers. The most populous state also has strict price controls and severe weather that can make an otherwise lucrative market less appealing.

The tough regulatory environment and catastrophic losses have exacerbated the state’s insurance woes.

Since 2022, seven of the top 12 property insurers in California have either paused or restricted  new home insurance policies in the state. State Farm and Allstate exited the California property insurance market in 2023, largely due to the increased risk posed by wildfires in the state.

The California Department of Insurance (CDI) has since responded by releasing a sustainable insurance strategy. The move aims to address the challenges inflation and climate change-related disasters have caused for the insurance industry. The strategy offers insurers better rates in exchange for their agreement to increase the amount of business they do in high-risk areas.

The plan appeared to be working, with Farmers pledging to increase its policies written in California earlier this month.

But these recent wildfires could make insurers adjust their strategy.

What’s next? Focused on recovery

“Our top priority is protecting Californians during this crisis and helping us to recover,” Lara said in announcing the moratorium.

The ongoing wildfires have killed at least 24 people and destroyed more than 12,000 homes, businesses, and other structures.

Total insurance losses are likely to reach $30 billion to $40 billion, according to financial analysts at Wells Fargo Securities. “Regardless of outcome, we see this as a manageable event for insurers,” the Wells Fargo analysts wrote.

They added that a total insured loss of $40 billion would represent a 2% equity hit to insurers.

Lara hopes the moratorium will prevent a repeat of the aftermath that followed the destructive wildfires in 2017 and 2018. Following those disasters, insurance companies dropped tens of thousands of policyholders. Many went on to secure coverage through the state’s FAIR Plan.

“I am using my moratorium powers to prevent insurance companies from canceling or non-renewing policies in wildfire-impacted areas so people don’t face the added stress of finding new insurance during this horrific event,” Lara stated.

Chris Schafer
Chris SchaferDeputy Managing Editor, News and Marketing Content

Chris is Insurify’s Senior Editor for home insurance. He’s a seasoned writer/editor with past experience across myriad industries, including insurance, SAS, finance, Medicare, logistics, marketing/advertising, and many more. He is passionate about breaking down complex subject material to make important information accessible to everyone. 

Chris began his career as a journalist, managing two weekly newspapers, then moving into marketing and content marketing roles. Before joining Insurify, Chris served as the content strategy manager at Siteimprove and as the content manager at Brandpoint, where he managed a team of content creators. 

Away from work, Chris is an active hockey player and proud father of two rambunctious little girls. Chris holds a Bachelor’s degree in English with a minor in mass communications from the University of Minnesota. 

Evelyn Pimplaskar
Edited byEvelyn PimplaskarEditor-in-Chief, Director of Content
Evelyn Pimplaskar
Evelyn PimplaskarEditor-in-Chief, Director of Content
  • 10+ years in insurance and personal finance content

  • 30+ years in media, PR, and content creation

Evelyn leads Insurify’s content team. She’s passionate about creating empowering content to help people transform their financial lives and make sound insurance-buying decisions.

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John Leach
Reviewed byJohn LeachSenior Insurance Copy Editor
Photo of an Insurify author
John LeachSenior Insurance Copy Editor
  • Licensed property and casualty insurance agent

  • 8+ years editing experience

John leads Insurify’s copy desk, helping ensure the accuracy and readability of Insurify’s content. He’s a licensed agent specializing in home and car insurance topics.

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