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On Thursday, November 5, the California Division of Insurance coverage (CDI) issued the long-awaited Bulletin 2020-11, implementing the 2020 wildfire season’s focused moratorium on cancellations and nonrenewals primarily based on wildfire publicity for admitted and nonadmitted residential property insurance coverage insurance policies positioned in sure ZIP codes affected by wildfire. The Bulletin was amended on November 6 to replace the checklist of affected ZIP Codes.
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In August, the CDI warned insurers to not nonrenew or cancel any residential property insurance coverage insurance policies in impact as of August 18 in “any recognized fireplace areas within the State” in anticipation of the publication of the ZIP Codes to which the moratorium on cancellation and nonrenewal would apply. California Insurance coverage Code part 675.1, enacted in 2019, offers that when a state of emergency has been declared, insurers could not cancel or nonrenew residential property insurance coverage insurance policies for one yr from the declaration of a state of emergency “primarily based solely on the truth that the insured construction is positioned in an space during which a wildfire has occurred.”
California Governor Gavin Newsom declared a state of emergency on August 18, 2020, and declared three extra states of emergency on September 6, 10 and 28. For every state of emergency, the hearth perimeter is decided by the California Division of Forestry and Fireplace Safety in session with the California Workplace of Emergency Companies, and the info is offered to the CDI. The CDI then publishes a bulletin (equivalent to Bulletin 2020-11) itemizing the ZIP Codes to which the moratorium on cancellation and nonrenewal applies, which incorporates each these ZIP Codes which have suffered wildfire in addition to any ZIP Codes adjoining to the hearth perimeter. This yr’s moratorium covers 477 separate ZIP Codes, a few of which fall beneath a number of states of emergency. The CDI famous that it might situation a supplemental bulletin if extra ZIP Codes are decided to be affected.
The Bulletin orders insurers to rescind any notices of cancellation or nonrenewal that they might have issued protecting properties within the affected ZIP Codes through the states of emergency, and to reinstate such insurance policies. We be aware, nevertheless, that this is applicable solely to insurance policies canceled or nonrenewed “primarily based solely on the truth that the insured construction is positioned in an space during which a wildfire has occurred.”
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