Local victims of the catastrophic Southern California fires can be assured their insurance policies will be valid for another year due to SB 824, authored by Insurance Commissioner Ricardo Lara in 2018 while serving as a state senator.
This important consumer protection law requires a mandatory one-year moratorium on insurance companies canceling or non-renewing residential insurance policies in certain areas within or adjacent to a fire perimeter after the governor has declared a state of emergency.
“Losing your insurance should be the last thing on someone’s mind after surviving a devastating fire,” said Lara. “This law gives millions of Californians breathing room and hits the pause button on insurance non-renewals while people recover.”
How the moratorium works
Following Governor Gavin Newsom’s declaration of a state of emergency, the Department of Insurance partners with the California Department of Forestry and Fire Protection (Cal Fire) and the Governor’s Office of Emergency Services to identify wildfire perimeters and adjacent ZIP codes within the mandatory moratorium areas. The protection from cancellation or non-renewal lasts for one year from the date of the Governor’s emergency declaration.
This one-year protection applies to all residential policyholders within the affected areas who suffer less than a total loss, including those who suffer no loss. Those who suffer a total loss have additional protections under the law.
Find out if you are protected
On the Insurance Commission Web site, find the fire name in the list and click the link to open the Commissioner’s Bulletin for a list of included ZIP codes. If you live in one of those ZIP codes, your insurance company cannot issue a cancellation or non-renewal for wildfire risk for one year from the date of the Governor’s emergency declaration associated with the nearby fire.
If your ZIP code is included in the moratorium and you received a notice of cancellation or non-renewal for wildfire risk, you should contact your insurance company to seek a reinstatement of the policy. If your insurance company refuses, you are encouraged to contact the Insurance Commission and file a request for assistance.
Non-licensed insurance adjusters
On January 7th, 2025, Lara declared a State of Emergency Situation and authorized “insurers and licensed insurance adjusters to be able to utilize non-licensed adjusters to the extent such use is reasonably necessary to respond to the losses arising out of the wildfires” with certain conditions. These conditions include active direction, control charge, and management of these non-licensed adjusters must be under the supervision of a qualified adjuster or manager authorized to do business in California.
These non-licensed adjusters also must be properly trained within 15 days of commencing activity related to the wildfires. This training includes familiarity with the California Unfair Practices Act, the Fair Claims Settlement Practices Regulations and all laws relating to property and casualty insurance claims.
So, if your insurance company states that they are shorthanded, it would be fair to remind them of this Insurance Commission exception.
