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California Regulator Issues Additional Homeowners Nonrenewal, Cancellation Moratoriums

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SACRAMENTO, Calif. //BestWire// - California Insurance Commissioner Ricardo Lara issued one-year nonrenewal and cancellation moratoriums for home policyholders affected by the Shelly Fire in Siskiyou County and Bear Fire in Sierra County.



A similar moratorium is expected to be issued for Ventura County residents impacted by the Mountain Fire, the regulator said in a statement.

California law allows the commissioner to identify areas that will be subject to moratorium after the governor declares a state of emergency. The regulator works with California Department of Forestry and Fire Protection and Governor’s Office of Emergency Services to determine the perimeter. The nonrenewal and cancellation restrictions last for one-year from the date the state of emergency is declared.

More than 11,000 policies in Siskiyou and Sierra counties are covered by the moratorium, the California Department of Insurance said in a release. The commissioner’s order covers structures within the designated perimeter and adjoining ZIP codes whether they suffered a loss or not.

Gov. Gavin Newsom issued an emergency declaration for Siskiyou and Sierra counties on Nov. 1.

The moratorium covers 14 ZIP codes in and around the Shelly Fire perimeter and six ZIP codes related the Bear Fire, the commissioner’s bulletin said.

On Nov. 7, Newsom issued an emergency declaration for Ventura County due to the Mountain Fire. The CDI said a formal nonrenewal and cancellation moratorium will be issued soon for affected ZIP codes. Attempt to gain further comment from the regulator regarding the potential scope of the Mountain Fire was not immediately successful.

“My moratorium will ensure that homeowners have the peace of mind knowing their insurance coverage remains intact,” Lara said in a statement. “Safeguarding wildfire survivors from non-renewals is crucial as we tackle the challenges posed by climate change and work toward lasting reforms to stabilize our state’s insurance market.”

So far this year roughly 1 million policies have been covered by moratoriums, the insurance department said.

Earlier this year, the CDI said it was working with university Cal Poly Humboldt on a public wildfire catastrophe model, which might be the first public wildfire model (BestWire, Sept. 18, 2024).

Attempts to gain comment from industry trade groups regarding the moratoriums were not immediately successful.

The five largest homeowners multiperil writers in California in 2023, based on direct premiums written, were: State Farm Group, with a 19.92% market share; Farmers Insurance Group, 14.93%; CSAA Insurance Group, 6.52%; Liberty Mutual Insurance Cos., 6.5%; and Mercury Casualty Group, 6.11%, according to BestLink.

(By Steve Hallo, senior associate editor, BestWire: Steve.Hallo@ambest.com)


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