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Commissioner Puts an End to Wildfire Nonrenewals

The moratorium will affect some 800,000 homeowners in California.
  • Timothy Darragh
  • January 2020
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Deluged with complaints that residents are losing their insurance coverage despite having paid their homeowners premiums and without having filed claims for decades, California Insurance Commissioner Ricardo Lara has ordered a moratorium on nonrenewals in wildfire disaster areas. “I am hearing the story again and again,” Lara said at a press conference. “This needs to stop.”

The move—the first time such a mandatory moratorium has been ordered under a new state law— is estimated to affect 800,000 homeowners, giving them breathing room to consider their options and shop for coverage. Lara said he has met more than 2,000 nonrenewed homeowners in recent months.

California’s moratorium on nonrenewals is a market intrusion that will impose significant financial burden and could affect homeowners facing other peril.

Erin Collins
National Association of Mutual Insurance Companies

In addition, the department is asking insurance companies to voluntarily cease all nonrenewals related to wildfire risk statewide until Dec. 5, 2020. The request for a statewide halt to nonrenewals was possible after Gov. Gavin Newsom declared a statewide emergency Oct. 27 caused by high winds, Lara said.

Erin Collins, assistant vice president of state affairs for the National Association of Mutual Insurance Companies, said the move would distort the marketplace. “California's moratorium on nonrenewals is a market intrusion that will impose significant financial burden and could affect homeowners facing other perils,” she said. “Insurance only works when rates can be properly matched to risk, and that's why the insurance industry has long been advocating for the state and local governments to better prepare for natural disasters, including wildfires, and to take action to mitigate potential losses.”

A statewide moratorium would provide California homeowners, renters, and businesses time for stakeholders to come together to work on lasting solutions, help reduce wildfire risk, and stabilize the insurance market, the department said in a statement.

California insurers incurred more than $12 billion in losses from three wildfires in November 2018—the Camp Fire in Butte County and Woolsey and Hill fires in Los Angeles and Ventura counties according to DOI data. Of more than 19,000 residential property claims in the Camp Fire, more than 11,600 were total losses.

Camp became the most destructive in state history, and eight of the state's 20 most-destructive blazes swept through communities in 2017 or 2018, according to the California Department of Forestry and Fire Protection. The second most-destructive fire, Tubbs, hit Napa and Sonoma in October 2017.

Timothy Darragh is an associate editor, BestWeek. He can be reached at

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