This week, the Los Angeles area of California has been hit by multiple wildfires, resulting in the destruction of tens of thousands of homes. The California government has announced a ban on insurance companies canceling or not renewing residential property policies in the disaster-stricken areas of Los Angeles.
According to an announcement released late Thursday (January 9) in Los Angeles local time, California Insurance Commissioner Ricardo Lara issued a one-year moratorium to protect homeowners in areas affected by the Palisades and Eaton wildfires or adjacent postal code areas from the penalties of insurance companies not renewing or canceling policies for a year, without considering whether their homes have suffered losses.
This order applies to all residential property policies in effect since Governor Newsom declared a state of emergency on January 7.
“Now is the time for you to focus on your family and health, the last thing you should worry about is your insurance,” Lara said.
Lara further stated, “I also urge insurance companies to halt any pending non-renewal and cancellation notices that homeowners received before the fires occurred. This means that if you received a non-renewal notice for your home insurance between October 9 (2024) and January 7 (2025) (within 90 days), your insurer should take the proper steps to retain you as a valued policyholder.”
“Our top priority is to protect Californians in this crisis and help our communities recover,” Lara said in the announcement. He also added that the moratorium aims to ensure that people do not face additional pressure to find new insurance in this terrible event.
Lara stated on Friday that making homes and communities safer from future wildfires must be the top priority.
“Looking ahead, I will be asking the governor and state legislature to support my proposal to provide grants for home hardening to consumers,” Lara said in a press conference on Friday. “We need to get money into people’s hands. This measure is crucial for protecting homes and increasing long-term resilience against wildfire risks.”
The home hardening grant program, similar to the California Wildfire Mitigation Program, provides funds to residents to help make their homes more resilient to wildfires.
The wildfires this week have resulted in at least 10 deaths and burned over 29,000 acres of land. As of early Friday morning Eastern Time, the fires in the Pacific Palisades and Pasadena communities were still largely uncontained.
According to Accuweather Inc., the total economic losses caused by this disaster, including uninsured damages, wage losses, and indirect economic impacts such as supply chain disruptions, are currently estimated to reach between 135 billion and 150 billion dollars.
Analysts at JPMorgan Chase stated that insurance companies could face bills exceeding 20 billion dollars, but as the disaster continues to unfold, this figure could increase further.