Wildfire insurance moratorium expires, allowing insurers to drop homeowners

California no longer requires insurance companies to cover homeowners in wildfire-prone areas.

Nearly 350,000 households in Los Angeles’ vulnerable foothills areas are no longer protected by the moratorium, which expired Saturday, according to the Los Angeles Times.

In 2019, the state prohibited insurers from dropping policyholders or declining to renew policies in wildfire-prone areas within a year of an emergency declaration there.

Around 2.4 million homes statewide could lose their protections under the moratorium this year.

The state introduced the moratorium shortly after the Camp fire in late 2018, which killed 85 and destroyed nearly 19,000 structures, making it the most devastating ever recorded in the state.

It was one wildfire in a string of major blazes that have burned across the state in recent years. Several of California’s largest fires have burned since then.

Some property owners lost coverage and others saw their premiums rocket out of reach, prompting more to take out expensive, barebones policies through the state’s FAIR Plan.

The state extended the moratorium last year as well.

The moratorium was designed to give homeowners a chance to make their properties and communities more fire resistant. Some communities and homeowners have done so, but it’s unclear how that will impact insurance companies’ calculus on a larger scale.

American Property Casualty Insurance Association’s Mark Sektnan said that more aggressive forest management policies in Lake Tahoe following a 2007 fire helped minimize destruction during the ongoing Caldor fire.

[LAT] — Dennis Lynch