Rural Insurance Oct 6

Rural Insurance Oct 6

Mike Stephens
Mike Stephens
News Reporter
For California Ag Today, I’m Mike Stephens

California halts insurance cancellations in major wildfire areas across 22 counties.

Wrestling with an insurance crisis that’s effected much of rural California for years, the state imposed a one-year ban that prevents carriers from dropping homeowners in areas affected by the Dixie Fire, Caldor Fire and other major 2021 wildfires.

The one-year moratorium, announced by Insurance Commissioner Ricardo Lara, affects about 325,000 homeowners. It came a month after Lara imposed a similar moratorium affecting 25,000 homeowners who live in the vicinity of the Lava and Beckwourth Complex fires.

The latest moratorium covers parts of 22 counties across Northern California and affects homeowners who live near the burn zones of the Dixie and Caldor fires. As well as the River, Tamarack, Antelope, McFarland, Monument, Fly and Cache fires.

Lara acknowledged that the moratorium isn’t a cure-all for the breakdown of the property-casualty insurance market in areas prone to wildfires. Responding to the rash of mega-fires in recent years, insurance companies have decided not to renew policies for tens of thousands of Californians.

Many end up having to buy coverage from the California FAIR Plan, the state’s “insurer of last resort,” which sells bare-bones policies that insure only against wildfire risk. By the time they’re finished purchasing separate policies, their annual insurance bill has doubled or tripled, costing them thousands.

The insurance commissioner has been negotiating with the industry to find ways to stabilize the rural markets. In the meantime, he’s imposed a one-year cancellation moratoriums each of the last three years, invoking a law he wrote while he was in the Legislature.

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