Key Takeaways

1. Lara’s Moratorium Authority: California Insurance Commissioner Ricardo Lara has long-standing “moratorium powers” to prevent insurers from canceling policies in wildfire-affected areas. This authority was not used when insurers first began to withdraw from high-risk zones.
2. One-Year Mandate—but Delayed: The newly issued one-year moratorium covers specific ZIP codes impacted by the Palisades and Eaton wildfires in Los Angeles. Despite the coverage relief, the timing means many victims lost their policies before the fires struck.
3. Where to Check: If you live in one of the affected areas, visit the California Department of Insurance website to see if your ZIP code is covered.

By Samuel A. Lopez – USA Herald

LOS ANGELES, CA – I’ve spent over two decades immersed in the legal and insurance sectors, and yet, I’ve rarely witnessed the level of frustration and betrayal felt by Californians over the recent wave of insurance cancellations. If you’re tuning in from the Los Angeles area—or anywhere in wildfire-prone California—you’ve likely heard that the state has slapped down a new moratorium preventing insurers from canceling or non-renewing homeowners’ insurance policies in certain ZIP codes devastated by the Palisades and Eaton fires.

But here’s the bigger story: Our state’s Insurance Commissioner, Ricardo Lara, had the power all along to stop giant insurers like State Farm and Allstate from fleeing wildfire risks. For months (if not years), we watched helplessly as policies were canceled left and right, leaving countless homeowners in the lurch. Now, after homes have been reduced to ash and hundreds of families lost everything, Commissioner Lara has decided to use those “moratorium powers.”

On Thursday, Lara said “I am using my moratorium powers to prevent insurance companies from canceling or non-renewing policies in wildfire-impacted areas, so people don’t face the added stress of finding new insurance during this horrific event.”

Yes, it’s a relief to see a one-year ban on cancellations for specific areas, but one can’t help wondering: What took so long? Governor Gavin Newsom has been issuing emergency proclamations for at least a year due to wildfire risks. Meanwhile, the insurance exodus has been no secret—especially during the scorching summer of 2024, when we saw an unprecedented spike in cancellations. So, why did the Commissioner wait until now, after irreparable damage, to act?

A Look at the New Moratorium

According to the California Department of Insurance (CDI), this mandatory one-year moratorium prevents insurers from canceling or non-renewing homeowners’ policies in designated ZIP codes around the LA area. For the Palisades Fire, the protected ZIP codes include:
90049, 90265, 90272, 90290, 90402, 91301, 91302, 91320, 91356, 91361, 91364, and 91436.

For the Eaton Fire, ZIP codes include:
91001, 91006, 91007, 91011, 91016, 91020, 91024, 91042, 91101, 91103, 91104, 91106, 91107, 91108, 91206, 91208, 91214, 91706, 91731, 91732, 91775, 91780 and 93563.

If your property is in one of these ZIP codes, you’re temporarily safe from having your policy canceled purely due to wildfire risk. In addition, Commissioner Lara is asking insurers to extend the 60-day grace period on premium payments that’s already required by existing state law, giving families more time to handle their insurance bills while grappling with the aftermath of the fires, and that’s “if” they even have insurance to worry about.

Why Now, and Why Not Sooner?

Here’s the blunt truth: California’s insurance industry has been under siege for years as wildfires become more frequent and more devastating. Insurers like State Farm and Allstate, among others, have drastically scaled back or outright refused to renew policies in high-risk areas, citing uncontrollable wildfire exposure. Yet, these same companies continued selling other types of coverage—like auto, life, and even business insurance—to Californians, profitably raking in premiums while pulling back from the most at-risk segments of the homeowners’ market.

Commissioner Lara’s newest statement, made on January 9, 2025, appears empathetic:

“My heart goes out to my fellow Angelenos. Our top priority is protecting Californians during this crisis and helping us recover”……”I am working on all fronts to make sure wildfire victims get the benefits they are entitled to, and they get it as soon as possible.”

For those reading this who have lost their homes in the Palisades or Eaton fires, these words may bring cold comfort—especially if their insurance coverage was canceled months before the flames.

Over the past year, Governor Newsom has issued 12 emergency proclamations in response to wildfires, and widespread news reports have repeatedly warned of severe wildfire seasons. So why, then, was the moratorium not enacted earlier in 2024—or even sooner?

As a seasoned legal analyst, I’d point out that the “moratorium powers” are not new. They were established under legislation meant to protect Californians against abrupt insurance cancellations in disaster zones.

The Human Cost of Inaction

Consider the hundreds of people who lost their homes in the LA-area wildfires. Many of them had homeowners’ policies dropped, leaving them scrambling to find new coverage—or simply going uninsured. They faced a nightmare scenario: losing not just the roof over their heads but also any financial safety net to rebuild. For these residents, the moratorium may feel like too little, too late.

I spoke with a family in Topanga Canyon whose policy was canceled in the fall of 2024. They tried shopping around, but every insurer they contacted either refused to cover them or offered sky-high rates. The family, strapped for cash, opted to go without insurance. Then the Palisades Fire struck, razing their hillside property. Now, they’re left with no resources to recover.

The blame game is in full swing, and many are directing frustration at both the insurance industry and Commissioner Lara. Yes, the insurers bear significant responsibility for aggressively cutting off homeowners in high-risk zones. But the Commissioner’s office is also supposed to serve as a watchdog, stepping in when companies profit from the state’s safer markets while abandoning communities in crisis.

Could the Moratorium Have Prevented These Tragedies?

Absolutely. A well-timed and sufficiently robust moratorium—enacted, say, mid-2024—could have ensured that thousands of policies remained in force through California’s peak fire season. This safety net might have provided a lifeline for homeowners who ended up losing everything. Instead, the moratorium only arrives now, after the devastation, effectively preventing future cancellations for those who still have insurance but offering no solace to those already canceled.

From an industry perspective, insurers argue that wildfire risks in California have become “uninsurable” under their existing business models. However, it’s worth noting they continue offering other profitable lines of insurance in California. If state regulators had leveraged the “moratorium powers” earlier, insurers might have been compelled to maintain or renew coverage for existing homeowners—or at least to slow their mass exodus while a longer-term solution was hammered out.

Next Steps and Resources

For now, the Commissioner’s office is at least signaling a more assertive approach. Alongside the one-year moratorium, policyholders in wildfire-affected zones are encouraged to exercise their rights under existing laws, including grace periods on premium payments. If you believe your policy has been unfairly canceled, you can file a complaint or check your ZIP code’s eligibility on the California Department of Insurance website.

Meanwhile, those of us with a vested interest in California’s future—homeowners, elected officials, insurers, and activists—must continue pushing for systemic reform. For the sake of transparency, I’ve been advocating for a balanced approach: one that safeguards homeowners from abrupt cancellations while recognizing the reality that insurers face escalating wildfire claims each year. But “balanced” shouldn’t mean abdicating our moral duty to keep families from ending up homeless and destitute.

For Further Reading

• California Department of Insurance – Check your ZIP code eligibility and file complaints.
• Commissioner Lara’s Official Statement – Press releases and updates.
• Governor Newsom’s Emergency Proclamations – Ongoing declarations regarding wildfire impacts.

By Samuel A. Lopez – Legal Analyst and Journalist, USA Herald