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California Insurance Commissioner imposes moratorium on property insurance cancellations for Palisades and Eaton fire victims, effective January 9, 2025

1/14/25

By: Amanda M. Figueroa and Marc J. Shrake

As expected, California Insurance Commissioner Ricardo Lara has issued a mandatory moratorium on cancellations and non-renewals of insurance for residential properties near the Palisades and Eaton fires. 

Through January 7, 2026, no residential property insurance in the specified ZIP codes may be canceled or non-renewed due to wildfire risk. This includes property insurance for “all homeowners’, condo unit owners’, mobile homeowners’, or residential renters’ insurance policies.” The moratorium—formally titled Bulletin 2025-1 and addressed to “All Admitted and Non-Admitted Insurers Writing Residential Property Insurance in California”—applies for one year from the California Governor’s January 7, 2025 proclamation of a state of emergency.

The moratorium is based on statutory authority in Insurance Code § 675.1.

Under Section 675.1(b)(1), the Governor’s emergency declaration means that no insurer may “cancel or refuse to renew a policy of residential property insurance for a property located in any ZIP Code within or adjacent to the fire perimeter, for one year after the declaration…, based solely on the fact that the insured structure is located in an area in which a wildfire has occurred.”

The Bulletin also requires insurers to (a) rescind any notices of cancellation or non-renewal for insurance in the specified ZIP Codes that were issued due to the wildfire risk since the Governor’s January 7 emergency declaration, and (b) offer to reinstate or renew any policies covering property in the specified ZIP Codes that were canceled or non-renewed due to the wildfire risk since the January 7 declaration.

When the moratorium was issued on January 9, thirty-five ZIP codes were covered by the Palisades Fire and Eaton Fire. The Palisades and Eaton Fires have grown since then, and the moratorium notes that the Department of Insurance may issue a supplemental bulletin listing additional ZIP Codes that are later determined to be within or adjacent to a fire perimeter. 

FMG’s Insurance Coverage & Extra-Contractual Liability National Practice Section has a team of property insurance coverage attorneys with decades of wildfire experience ready to advise and support its insurance company clients in any investigation, adjustment, coverage, or litigation matters. Please visit https://www.fmglaw.com/practices/insurance-coverage-and-extra-contractual-liability/ for more information. 

For any questions or further clarification, please contact Amanda M. Figueroa at amanda.figueroa@fmglaw.com, Marc J. Shrake at marc.shrake@fmglaw.com, or your local FMG attorney.