California issues wildfire insurance moratorium for 2nd straight year

For the second year in a row, California has issued a one-year moratorium banning insurers from canceling or not renewing policies for homeowners in or near areas hit by this year’s record-breaking wildfires.

The new moratorium issued by the Department of Insurance covers about 2.1 million policyholders in 21 counties across the state, spanning from Siskiyou in the far north to San Diego in the south, according to the Los Angeles Times. About 413,000 homeowners covered by last year’s moratorium also fall under this year’s order, while 600,000, the Times reported.

“Losing your insurance should be the last thing on someone’s mind after surviving a devastating fire,” insurance commissioner Ricardo Lara said in a statement. “My action gives millions of Californians breathing room and hits the pause button on insurance non-renewals while we take additional steps to expand our competitive market.”

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As the impact of climate change has increased the severity and frequency of major wildfires in the state, insurance providers have lost billions of dollars in profits in recent years. Rising premiums, or the withdrawal of providers from the market, has further contributed to California’s housing affordability crisis.

Two major insurance groups, the American Property Casualty Insurance Association and Personal Insurance Federation of California are backing the state’s latest move.

“We hope to work collaboratively on comprehensive solutions to better account for increased wildfire risk in homeowners coverage, which will increase availability of insurance,” the groups said in a statement.

“While changing the trajectory of climate change will take time, we need to take action now to make our communities more resilient and protect the lives and property of all Californians.” [LAT] — Kevin Sun