Los Angeles homeowners living in the zones of the Palisades and Eaton fires cannot be dropped from their insurance policies, thanks to a moratorium issued by California’s insurance commissioner on Thursday.
Commissioner Ricardo Lara issued a bulletin shielding any resident who owns property within the perimeters or adjoining ZIP codes of those two fires from having their home insurance policy canceled or from facing a nonrenewal over the next year.
“My heart goes out to my fellow Angelenos. Our top priority is protecting Californians during this crisis and helping us recover,” Commissioner Lara said in a news release, adding that he was enacting the moratorium “so people don’t face the added stress of finding new insurance during this horrific event.”
The Palisades and Eaton fires, among the most destructive in California’s history, erupted as the state was already grappling with an exodus of insurance companies, who are increasingly pulling out of the region as wildfires become more frequent and ferocious.
Many homeowners in the worst-hit areas of Los Angeles this week were carrying insurance through a state-backed system called the California FAIR plan, which is considered a last resort for those who can’t otherwise find coverage. California FAIR plans are more expensive and offer less coverage than home insurance plans on the private market.
In addition to offering homeowners a financial safety net, home insurance is a key component in the housing market: Banks won’t issue a mortgage without proof of coverage, so as home insurance companies exit areas that are deemed too high-risk, entire swaths of California’s housing market are rendered inaccessible to anyone other than cash buyers, who are generally wealthier than buyers who require a mortgage.
The insurance moratorium is similar to a California policy adopted in 2019 that offered one year of protection for homeowners affected by that year’s fire season. Around 800,000 homes were included in that moratorium.
Since 2020, the share of home insurance contracts dropped in California has grown each year, according to data issued last month by congressional investigators. Many California counties are now among those with the highest rates of so-called nonrenewals in the country.
Commissioner Lara also called on insurance companies to halt any pending nonrenewals or cancellations for properties located near wildfires, including nonrenewals that were issued up to 90 days before the fires broke out. And he asked insurers to extend the grace period on policyholders, which is 60 days under existing law, to pay their premiums.
Californians can check if their ZIP code is included in the moratorium on the Department of Insurance’s website.
Christopher Flavelle contributed reporting.
The post Homeowners Affected by Palisades and Eaton Fires Get Insurance Protections appeared first on New York Times.
