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Lara Calls For Moratoriums On Homeowner Insurance Non-Renewals

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Sacramento, CA – State officials are working to stall risk-averse insurers from doing business with homeowners in high wildfire risk areas.

On Thursday, California Insurance Commissioner Ricardo Lara issued a mandatory one-year moratorium on insurance companies from choosing to not renew policyholders in zip code areas impacted by 16 of the most recent wildfire disasters in northern and southern parts of the state for which Governor Gavin Newsom issued emergency declarations.

The move is expected to provide some relief to at least 800,000 homeowners and renters in areas in and around the 46 Fire, Eagle, Easy, Getty, Glen Cove, Hill, Hillside, Kincade, Maria, Reche, Saddle Ridge, Sandalwood, Sky, Tick, Water, and Wolf fire incidents.

Additionally, Lara, invoking Newsom’s Oct. 27 state of emergency declaration for the entire state over wildfire conditions, also issued a notice requesting an immediate voluntary moratorium on all non-renewals in California is they relate to wildfire risk for a one-year period.

Relief For Mother Lode Residents?

It remains to be seen how the latter move will impact homeowners in the Mother Lode and other high fire hazard risk communities that have received cancellations or non-renewal.

Lara’s notice states that in order to provide California homeowners, renters, and businesses peace of mind, and to allow time for stakeholders to come together to work on lasting solutions and help reduce wildfire risk, his office hereby requests all insurers writing residential and commercial property insurance in the state to cease non-renewing policies for any policyholder on the basis of the potential for wildfire risk until Dec. 5, 2020.

It further outlines that, if the trend of non-renewals is allowed to continue in the impacted communities, it could further disrupt local real estate markets and cause property values to decline, reducing available tax revenue for vital residents’ services such as fire protection, community fire mitigation, law enforcement, road repairs, and hospitals.

This latest move by Lara’s office, intended to help address what the Tuolumne County Association of Realtors (TCAR) and other industry groups sounded alarms about earlier this year: a “spreading epidemic” of insurance premium nonrenewals and cancellations, follows on the heels of another recent action he directed at California FAIR Plan insurers.

As reported here, Lara, who has the power to revoke approval of how the FAIR Plan, established under state law as the homeowners’ “insurer of last resort,” operates, ordered it to offer a comprehensive homeowner insurance policy in addition to the current dwelling fire-only coverage by June 1, 2020.

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