California Wildfire Victims Benefit from Insurance Protections
In response to the recent wildfires, California Insurance Commissioner Ricardo Lara has issued a notice offering critical relief to affected policyholders. The notice aims to halt pending non-renewals and cancellations and provides other safeguards to help residents navigate the aftermath of the disasters.
Pausing Cancellations and Non-Renewals
Commissioner Lara’s Notice No. 2025-01, issued on January 9, 2025, imposed a minimum six-month pause on pending property insurance cancellations and non-renewals. These were issued within 90 days before January 7, 2025, and were set to take effect after that date. This measure offers temporary stability, allowing policyholders whose coverage was at risk to potentially maintain their insurance for a longer period. The Commissioner emphasized that companies should “forgo any pending nonrenewals and cancellations” for properties in and around the wildfire areas.
The pause applies to notices sent by insurance companies in the ninety days prior to January 7, 2025, that were not yet in effect when the wildfires began.
Existing Protections and Reminders
Commissioner Lara’s notice also reinforces existing protections under California law, including:
- Premium Payment Grace Period: Insurers are required to provide a 60-day grace period for residential property insurance premium payments following a state of emergency. The Commissioner encourages insurers to extend this grace period and work with policyholders facing difficulties.
- Moratoriums on Non-Renewals and Cancellations: California law already includes moratoriums on cancelling or refusing to renew residential property insurance policies in areas impacted by wildfires. These rules prevent insurers from taking action against properties “within or adjacent to the fire perimeter” for one year after a state of emergency. For those who have lost their homes due to a disaster, insurers are required to offer to renew the policy for at least the next two years.
Benefits for Policyholders
These measures are designed to offer critical support to residents grappling with the aftermath of the wildfires. By pausing non-renewals and cancellations, extending payment grace periods, and establishing moratoriums, the state aims to ensure homeowners are not further penalized due to circumstances beyond their control.
Policyholders facing non-renewal notices issued in the past year are urged to review the notice dates for compliance with existing California law and the Commissioner’s January 9 Notice, or to contact their brokers or insurance attorneys for assistance.
Note:
- Insurers are required to provide at least 75 days’ advance notice of non-renewal.
- The Commissioner reminds insurers of their responsibilities.
The combined effect of the Notice and the existing laws provides a framework for stability for the affected communities during this challenging time.
