CA Finally Wields its “Moratorium Powers” to Halt Insurance Cancellations in LA Wildfire Zones—For Many, the Relief Comes Too Late

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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.