State Bans California Fire Insurance Cancellations For Homeowners In Major Wildfire Areas

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Less than a week after Singleton Schreiber filed two Dixie Fire lawsuits against PG&E over the utility company’s negligence in failing to prevent the fire from starting in known high-risk conditions, the state of California has imposed a one-year ban preventing insurance carriers from dropping homeowners who live in areas including those affected by the Dixie Fire and other major wildfires.

In the past, insurers have argued that if the state wants to keep their business in those regions, it must allow them to charge higher premiums that better align with the rising risk — and cost — of wildfires.

However, recent bills to allow insurers to raise rates for California fire insurance have failed to pass the California state legislature, which acknowledged consumer groups arguing they would be unfair to homeowners. With California wildfire insurance is at such a premium for homeowners, the 12-month moratorium announced September 21, 2021, by state Insurance Commissioner Ricardo Lara, is intended to help 325,000 homeowners in 22 counties keep their only source of California fire insurance for at least another year.

 
Fire near homes on hillside

Previous California Wildfire Insurance Cancellation Bans

Similar insurance cancellation bans have been enacted in recent years for the many homeowners in high-risk areas like Butte County who already suffered immense property damage due to fires like the Camp Fire and others.

Before imposing a similar moratorium last year, Lara told the New York Times, “If we don’t want to be in this position every year, we have to reduce the risk to lives and homes.”

The ban appears to be a necessity to protect victims of wildfires throughout the state, who have experienced extensive property damage and loss due to fire. Recent studies have shown that due to recent California wildfires, insurance companies have been more inclined to cancel policies or drop policyholders.

In 2019, insurers in San Diego County dropped 3.7% of all homeowners policies countywide, due to risk of wildfires. Now, at least wildfire victims don’t need to worry about having an insurance policy canceled right up from under their feet.

What Does the California FAIR Plan Cover?

One of the last resorts many people wind up having to pursue is buying California FAIR plan insurance, which offers stripped-down policies for coverage against wildfire risk only. California FAIR insurance requires homeowners to buy separate policies to cover their homes against burglary and other incidents.

The California FAIR plan offers coverage for home insurance, renters insurance, and condo insurance for those in high-risk wildfire insurance areas. FAIR Plans are sometimes subsidized by private insurance companies but are offered mostly to those who would be denied California fire insurance based on the high-risk location or condition of their property.

The moratorium on insurance cancellations should help prevent thousands of people from losing wildfire insurance and having to purchase California FAIR insurance. Anyone experiencing personal injuriesproperty damage, and loss, or dealing with bad faith insurance companies who deny legitimate fire damage claims

Fire Breaks and Fire Hardening

This year’s moratorium isn’t a cure-all for the breakdown of the California homeowners insurance market in major wildfire-prone regions, as tens of thousands of Californians have lost insurance coverage for fires in recent years, having to rely on litigation brought forth by experienced California wildfire attorneys to fill the void in coverage.

While the moratorium puts a temporary band-aid on the wound felt by many California wildfire victims, the state is looking to establish standards for fire prevention measures like fire breaks and fire hardening. 

These measures — including fuel breaks and building retrofits — would provide a measure of security that could entice insurers back to the fire-prone neighborhoods they’ve deserted.  Fire hardening is just one tool in the quiver of legislatures looking to fight the increasing frequency of wildfires caused by climate change.“My moratorium orders help provide short-term relief as we address the root causes of these ever-intensifying natural disasters,” Lara said in his statement released on Sunday.” This California law empowers my office to help give people the breathing room they desperately need as they recover,” he added, pledging to “continue working to create long-term solutions.”

Get Insurance Claim Assistance from Experienced California Wildfire Attorneys

If an insurance company acts in bad faith — or if you don’t have insurance at all — you still deserve compensation for injuries and damages caused by wildfires started by power companies. Singleton Schreiber will fight for you to get you everything you are entitled to, and help you move on with your life.

Get more information about our experienced fire litigation attorneys, review our Dixie Fire lawsuit resources, or contact us for a free claim evaluation today.