In a move affecting 2.1 million California policyholders, the State Insurance Commissioner on Thursday barred insurance companies from cancelling or non-renewing residential property insurance affected by the unprecedented wildfires that ravaged the state this year.
The mandatory one-year moratorium covers residential policies in ZIP codes located within or adjacent to recent wildfire disasters under recently enacted Senate Bill 824, also known as the Wildfire Safety and Recovery Act. The action by State Insurance Commissioner Ricardo Lara also provides additional protection for nearly 364,000 policyholders included in last year’s moratorium.
Consumers can go to the California Department of Insurance website to see if their ZIP code is included in the moratorium. The zip codes are organized by each major fire.
The Commissioner’s action is the second time the moratorium law has been invoked since 2018. After the wildfire season a year ago, the law was activated on Dec. 5, 2019 to protect more than 1 million policyholders. The moratorium follows Governor Gavin Newsom’s emergency declarations this year on August 18, September 6, September 10, and September 28.
What Homeowners Can Do
Across California, insurance companies have responded to losses by reducing their risk exposure and dropping homeowners coverage in fire-prone areas. At the same time, insurers have been raising insurance premiums for the same coverage.
Because the size and severity of California wildfires are likely to continue, policyholders will face ongoing challenges in coming years to protect their homes. Marsh & McLennan Agency (MMA) recommends that clients take the following steps:
- Conduct a comprehensive policy review now. Verify the policy has full replacement cost and confirm the dwelling limit is in line with updated construction costs.
- Understand the policy exclusions and minimize gaps in coverage.
- Develop a detailed plan of action for when an evacuation is ordered.
- Consider new, in-home technology that can protect the home.
- Determine if the insurance carrier provides for a fire protection team to respond to an on-site incident. Note, there is no guarantee that they will be able to gain entrance to the home. The carrier has a limited number of response trucks and they may not be able to access the neighborhood due to road closures set up by the fire department.
- Create or expand the defensible space around a home and other structures.
- Remove combustible plants and trees a minimum of 200 feet.
- Ensure that all landscaped areas are properly covered by an irrigation system.
- Thin out trees before winds occur.
- Integrate hardscape into the yard. Hardscape includes rocks, gravel and crushed stones.
- Water vegetation regularly to keep moisture levels high.
- Keep flammable vegetation away from propane tanks and solar panels.
- Position woodpiles a minimum of 30 feet from any structures and cover with a heavy canvas tarp.
- Consider replacing wooden decks with decks made of fire-resistant material.
- Consider replacing a wood shake or wood shingle roof with fire-resistant material such as tile, composition, or metal.
- Enclose open roof eaves with sheathing or fascia boards.
- Consider replacing windows with fire resistant glass and steel window frames. Fireshades are also an option. Designed to deploy either automatically or remotely, these shades drop down over windows to block heat of up to 2,000 degrees Fahrenheit.
- Install a spark arrestor to an uncapped chimney.
MMA is Here To Help
MMA has a team of professionals that can address all of a homeowner’s property and casualty needs. To learn more, contact your MMA representative or visit MarshMMA.com.