As a historic wildfire season winds down, California Insurance Commissioner Ricardo Lara has given Californians some temporary relief from losing their homeowners' insurance policies for another year.
Because several regions of California are fire-prone, premiums and nonrenewal rates have skyrocketed in those areas as companies do not want to pay for damages caused by increasingly devastating wildfires. So far in 2020, more than four million acres have burned, more than doubling the previous modern-day record for the state. Lara has enacted the moratorium, which will give 2.1 million homeowners another year to find a different insurance company or take steps to mitigate fire risks on their property and attempt to convince their insurer to extend coverage.
The moratorium comes after hundreds of thousands of homeowner-insureds were dropped by their insurers in 2019. The state's ten most fire-prone counties saw a more than 200% increase in nonrenewal.
Enrollment in the California FAIR Plan, a state-run pool providing basic fire coverage to customers who can't find another insurer, jumped 225% in 2019.
You can read more about the moratorium here.
Editors Note: With the number of natural disasters increasing at an alarming rate, it may become necessary for more states to enact similar moratoriums. The legality of these moratoriums could potentially be tested in court if insurers are held accountable for high losses they did not account for when drafting the policies and premiums.