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Insurance commissioner’s decision doesn’t impact Plumas — yet

Insurance Commissioner Ricardo Lara issued a mandatory one-year moratorium on insurance companies non-renewing some policyholders in the state, but the immediate impact might not be felt here in Plumas County.

The moratorium, issued Dec. 6, will help at least 800,000 homes in wildfire disaster areas in Northern and Southern California associated with a number of large fires in the past couple years.

Though Plumas isn’t part of the initial moratorium, Lara asked insurance companies to voluntarily cease all non-renewals related to wildfire risk statewide until Dec. 5, 2020, in the wake of Governor Gavin Newsom’s  declaration of statewide emergency due to fires and extreme weather conditions.

Local insurance agents contacted were reluctant to discuss the moratorium until they received more direction from their parent companies.

According to a statement by Lara, a statewide moratorium would provide all California homeowners, renters, and businesses peace of mind, and allow time for stakeholders to come together to work on lasting solutions, help reduce wildfire risk, and stabilize the insurance market.

“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,” said Commissioner Lara. “I am calling on insurance companies to push the pause button on issuing non-renewals for one year to give breathing room to communities and homeowners while they adapt and mitigate risks, give the Legislature time to work on additional lasting solutions, and allow California’s insurance market to stabilize.”

While existing law prevents non-renewals for those who suffer a total loss, the new law (authored while Lara was a senator and enacted by his Dec. 6 declaration) established protection for those living adjacent to a declared wildfire emergency who did not suffer a total loss — recognizing for the first time in law the disruption that non-renewals cause in communities following wildfire disasters.

The Dec. 6 announcement named specific zip codes affected for seven of the 16 wildfires within state-declared emergency areas, and CAL-FIRE is working to identify perimeters for the remaining nine fires, which the Department of Insurance will announce soon. The seven fires listed include the Eagle, Getty, Hill, Kincaid, Maria, Saddle Ridge and Tick.

In August, the Department of Insurance  released data revealing insurance companies are dropping an increasing number of residents in areas with high wildfire risk.

The number of consumers covered by the FAIR Plan—California’s insurer of last resort —has surged in areas with high wildfire risk. According to the  U.S. Forest Service, more than 3.6 million California households are located in the wildland urban interface where wildfires are most likely to occur.

Last month, Lara ordered the FAIR Plan make some changes.By April 1, 2020, the FAIR Plan will increase the Dwelling Fire combined policy limit from $1.5 million to $3 million, in recognition of higher home values.

By February 1, 2020, the FAIR Plan will offer a monthly payment plan without fees and allow people to pay by credit card or electronic funds transfer without fees.

By no later than June 1, 2020, the FAIR Plan will expand its coverage to offer a full homeowners policy in addition to its current limited fire-only policy.

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