California Bans Insurers From Dropping Homeowners In 2021 Wildfire Zones

The moratorium, issued by Commissioner Ricardo Lara, requires insurers to retain these policyholders for a year and covers people who live near some of the largest wildfires of 2021, including the KNP Complex in Sequoia National Park.

Lara's order means moratoriums are now in place in parts of 31 counties struck by wildfires this year, covering a total of 618,000 homeowners. The new order affects homeowners in parts of Fresno, Stanislaus, Calaveras, Tulare, Shasta, Del Norte, Humboldt, Inyo, Kern, Lake, Mendocino, Siskiyou, Tuolumne and Trinity counties.

Lara's move illustrates that the insurance crisis in California wildfire country remains a persistent problem, even though it's shown signs of easing in recent months.

After several years of rate hikes, some of the major insurers have told the Department of Insurance they plan to expand coverage in areas they'd been abandoning. Allstate Corp., for instance, told the state it plans to sell new policies in California for the first time since 2007.

Nonetheless, many homeowners in mostly rural areas are still struggling to find a company willing to take them. After the fires of 2017 and 2018 cost insurance carriers billions of dollars, they dropped tens of thousands of homeowners.

Most wound up on the FAIR Plan, the state-mandated "insurer of last resort." A typical homeowner who'd been paying $2,000 a year for coverage saw premiums double or triple.

In addition to people living near the KNP Complex fire, the latest order covers zip codes in or near the footprint of the River Complex, French, Washington, Windy, KNP Complex and Hopkins wildfires.

KNP fire sparked evacuations in Valley

Started by a lightning strike in early September, the KNP fire has been one of the most dramatic of the year's fires, prompting evacuation orders in parts of Fresno and Tulare counties, while threatening ancient sequoia trees in Sequoia and Kings Canyon national parks. The fire has burned more than 88,000 acres and was 75% contained as of Wednesday.

Just south of the KNP burn zone, the Windy Fire has chewed through 97,000 acres and was 95% contained Wednesday. It, too, was started by lightning.

Lara has the authority to issue the moratoriums under SB 824, a law he authored as a state senator in 2018.

"The law gives wildfire survivors much-needed breathing room from having to immediately shop for insurance as they recover, while stabilizing the insurance market as well," he said in a prepared statement.

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