LOS ANGELES _ California regulators on Thursday pulled the emergency brake on insurers fleeing California's fire zones.
Insurance Commissioner Ricardo Lara announced a one-year moratorium banning insurers from not renewing policies for homeowners in wildfire-ravaged areas of the state.
"I have heard the same story again and again. People getting dropped by their insurance after decades," Lara said. "To add insult to injury, many struggle to find coverage."
As fires have grown increasingly destructive, the state has seen a corresponding exodus of insurers from the hardest-hit areas. More California homeowners are having to resort to plans that provide less coverage.
On Thursday, Lara said the moratorium will give both homeowners and insurers time to reassess a path forward for living with wildfires.
The plan affects more than 800,000 homeowners in Northern and Southern California who live in ZIP codes next to 16 recently declared wildfire disasters, including those near the Kincade fire in Sonoma County, the Saddleridge fire above Sylmar and the Tick fire in Canyon Country.
While the moratorium is legally binding for insurance providers around those fires thanks to a law that went into effect this year, Lara called on insurers statewide to voluntarily follow suit.
"This wildfire insurance crisis has been years in the making, but it is an emergency we must deal with now if we are going to keep the California dream of home ownership from becoming the California nightmare, as an increasing number of homeowners struggle to find coverage," he said.
The order is the latest move Lara has made to try to adjust California's insurance market to increasingly destructive disasters and oncoming climate change.
In July, Lara and other state lawmakers hosted a roundtable discussion at UCLA where he announced his agency was collaborating with a United Nations group tasked with establishing a framework for insurers to operate in a more efficient, disaster-hardened world.
A California Department of Insurance report last year found that the number of homeowners in the wildland-urban interface who complained about getting dropped by their plans more than tripled from 2010 to 2016. Complaints about increased premiums rose 217%.
Those statistics provide a limited view of the problem, as the state has no way of tracking policy nonrenewals and individual premium hikes. But they reflect the cusp of a trend that is expected to worsen, officials have said.
Areas where fires are common, like Lake County, have been particularly hard hit.
After a series of massive fires, residents living in or near forested areas are facing rate hikes so significant they're taking circuitous routes to find cheaper and less comprehensive coverage. Sometimes that path ends at the California Fair Access to Insurance Requirements, also known as the FAIR plan.
The FAIR plan was created in 1968 amid a decade of riots and brush fires that led people in California to lose coverage for reasons beyond their control. It's funded by the insurance companies that operate in California.
