Insurance Companies In California Banned From Dropping Fire Polices

California Insurance Commissioner also calls for one-year moratorium on cancellations.

Homeowners in fire-prone areas in California may no longer have to fear about their insurance company canceling their homeowner’s policy now that California Insurance Commissioner, Ricardo Lara, has issued a moratorium on the practice.

During a news conference in Oakland Hills, Lara announced a new policy that prohibits insurers from dropping policies for those that live in areas where recent wildfires have occurred. Doing so means that more than 700,000 homeowners will now be protected.

And while none of those homes are located in San Diego County, the California Insurance Commission is asking insurance companies throughout the state to follow suit and decline to drop any policies in the year.

“People have been dropped by their insurance companies after decades and it needs to stop,” said Lara. “I am calling for a one-year moratorium on wildfire related non-renewals in order to give consumers temporary breathing room while we work on lasting solutions.”

The announcement comes as homeowners continue to live in fear of a rising number of large and destructive wildfires as well as what some say is a willingness by insurance companies to try and avoid millions in liability claims.

El Cajon homeowner, Curtis Boyer, said he was one of many who was told that his insurance policy, one he had paid on for 30 years, would not be renewed. Boyer said his insurer dropped him despite never having filed a single claim.

“What you see here is an excuse to get rid of me. But for what reason, I don’t know,” Boyer told NBC 7 Responds.

Boyer is not alone. However, while homeowners are feeling the pressure, so too are insurance companies.

According to figures from the California Department of Insurance, insurers have paid out more than they made over the past two years because of the wide-ranging destruction caused by the recent wildfires. In 2017, insurance companies paid more than $2 for every $1 they charged in premiums. Last year they paid $1.70 for every dollar made.

“As climate change accelerates, we are facing more and growing wildfires in California, and we must adapt to that reality and factor climate change into coverage and rates to ensure availability of insurance for all homeowners,” said Rex Frazier, president of the Personal Insurance Federation of California.

Added Frazier, “Year-over-year losses that the industry has seen are not sustainable for companies or good for homeowners. We look forward to working with the insurance commissioner to anticipate and prepare for these impacts on the insurance market to ensure that homeowners have access to coverage.”

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