California passed temporary restrictions on Thursday banning insurers from declining or refusing to renew home-insurance policies for homeowners in certain wildfire-prone parts of the state in an effort to halt an insurance-availability crisis.
Due to the loss of coverage by many insurers and insurance companies, many homeowners and business owners in certain parts of California are unable to find insurance coverage or have to pay exorbitant premiums in order to secure coverage.
Due to the catastrophic wildfires in 2017 and 2018 that devastated parts of California, many insurers have hastily retreated from offering coverage for any wildfire-prone properties, causes tens of thousands of home insurance policies in areas with high wildfire risk in the past two years, to not be renewed for coverage.
California stated that its one-year moratorium applies to about 800,000 homes, and more areas are expected to be added. The new law applies to 16 wildfires that occurred in 2019, the state emphasized.