California slaps ban on homeowners insurance cancellations in two more wildfire areas
California regulators Thursday temporarily banned insurers from canceling homeowners living in and around the burn zones of two of the biggest wildfires to erupt this year.
Amid an insurance crisis in wildfire-prone areas, Insurance Commissioner Ricardo Lara slapped a one-year moratorium on insurance non-renewals in areas hit by the Lava and Beckwourth Complex fires. The fires have burned a combined 131,000 acres but are largely contained.
The decision affects almost 26,000 policyholders in Plumas, Lassen and Siskiyou counties. Many of the policyholders were already protected by a moratorium issued after last year’s fires, and now will be given another reprieve from non-renewals.
It’s the third straight year that Lara has imposed the one-year ban on non-renewals. Last year he issued a moratorium covering 2.4 million policyholders, following the record fire season in which more than 4 million acres burned.
Lara invoked SB 824, a law he authored while a member of the Legislature in 2018. The law creates a one-year breather for homeowners living in or immediately adjacent to the burn zone of a fire that prompted a declaration of a state of emergency by the governor.
Lara’s latest ban doesn’t cover two big fires currently raging in Northern California, the Dixie and Caldor fires. Michael Soller, a spokesman for the Department of Insurance, said the commissioner has to wait until the final perimeters of those fires are established before he can act.
“We’re not there yet,” Soller said.
Many homeowners forced onto the California FAIR Plan
While he can’t yet formally declare a moratorium in connection with Dixie and Caldor, Lara has urged insurers to hold off on issuing non-renewal notices to policyholders living in the vicinity of those two fires, Soller said.
Dixie, the second-largest wildfire in California history, had grown to 678,369 acres early Thursday with 35% containment. It’s already destroyed the historic downtown of the tiny Plumas County community of Greenville.
The Caldor Fire, burning through El Dorado County, was at 65,474 acres early Thursday. Although its growth has slowed in the past 24 hours, it still was completely uncontained. On Tuesday it wiped out much of Grizzly Flats, a small community southeast of Pollock Pines.
Lara’s department has been wrestling with the non-renewals of tens of thousands of homeowners’ policies due to wildfire hazards in recent years. Most of those homeowners wind up being forced onto the California FAIR Plan, the state’s “insurer of last resort,” and having to pay double or triple what they had been paying.
He has been negotiating with the industry over a plan that would have insurers sell policies again in areas that demonstrate they’ve “hardened” their communities against fire by retrofitting homes and carving out substantial vegetation-free zones.
This story was originally published August 19, 2021 at 2:20 PM with the headline "California slaps ban on homeowners insurance cancellations in two more wildfire areas."