California on Wednesday expanded its one-year ban on home insurers dropping policies in wildfire-hit areas to include 200,000 more homes, including in San Bernardino County and Northern California, the Department of Insurance announced.

With the footprint of the Sandalwood and Hillside fires now included in the order, the moratorium first issued by Insurance Commissioner Ricardo Lara on Dec. 5 now requires that insurance coverage continue to be provided to more than 1 million homes that were in or adjacent to 16 wildfires this year. Lara’s initial order applied to 800,000 homes, including those near the Kincade and Saddleridge fires.

The move is in response to insurers increasingly dropping policies in hard-hit wildfire areas as they recognize the potential liabilities involved. That leaves in the lurch homeowners who want to rebuild and incoming residents who can’t find a policy.

“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,” Lara said in a media statement. “I look forward to working with our Legislature and local communities on additional lasting solutions.”


Though existing law prohibits insurers from dropping policies for homeowners who have suffered a total loss in a wildfire, the moratorium expanded on Wednesday relies on a law that went into effect this year that extends that rule to homeowners who live adjacent to a declared wildfire emergency and did not lose their home.

While some experts have expressed concern the moratorium could discourage future insurers from entering those communities, it’s designed to narrowly affect those most impacted by the fires, said Mark Sektnan, vice president for state affairs for the American Property Casualty Insurance Assn., an industry group.

“All of this is a balancing act to make sure you maintain a sustainable, viable market for the people that live in those areas,” he said.


Wednesday’s announcement expanded the moratorium to also include homes in Contra Costa, Solano and Ventura counties. It’s also the latest step by Lara’s office to stabilize California’s home insurance market, which is shifting as the risks that come with covering homes in wildfire-prone areas and the neighborhoods that surround them have led to billions of dollars in claims in recent years.

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%.

From 2015 to 2018, in counties with the most homes at risk of wildfire, insurance companies declined to issue new policies, and renew old ones, by the thousands. At the same time, data shows those communities increasingly turned to the cheaper, less-comprehensive coverage offered by the California Fair Access to Insurance Requirements, also known as the FAIR plan.

State lawmakers created the FAIR plan 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 an insurance pool for high-risk policies that counts every insurer in California as a member.


In November, Lara’s office ordered the FAIR plan to double its policy coverage limit to $3 million and expand its coverage beyond wildfires by June 2020. The FAIR plan’s president is challenging that order in court.