Commissioner blocks insurance cancelations in fire zones: What to know
LOS ANGELES - The fast-moving and devastating wildfires that have destroyed homes across the Los Angeles area will test California’s efforts to stabilize the state’s insurance marketplace as many insurers have stopped issuing residential policies in recent months due to the ongoing threat of wildfires.
The vast property damage in a disaster-prone state with high real estate prices and an uncertain insurance landscape can make coverage more expensive and even harder to find.
One area likely to feel the impact — and encounter challenges rebuilding — is Pacific Palisades, an affluent community on the west side of Los Angeles. This week's wildfire there has been named as the most destructive in the modern history of the city of Los Angeles.
State authorities previously listed the Palisades as one of the five Southern California areas with the highest concentration of potential wildfire risks. The community also is among the areas most impacted by an unavailability of insurance coverage.
When State Farm decided to discontinue coverage for 72,000 houses and apartments in California last year, it dropped nearly 70% of its market share in Pacific Palisades, according to the San Francisco Chronicle.
In fact, in 2023, seven of the 12 largest insurance companies by market share in California either paused or restricted issuing new policies in the state.
Hastings Ranch resident Patricia Vahdat, right, and a neighbor speak in front of another one of her neighbors home which was completely destroyed by the Eaton fire in the Hastings Ranch community of Pasadena early Wednesday morning Jan. 8, 2025. Vahd
What to know if your policy was canceled
State Insurance Commissioner Ricardo Lara has issued a one-year moratorium on insurance non-renewals and cancelations for those within the perimeters or adjoining ZIP codes of the Palisades and Eaton fires.
The moratorium is in effect for one year from the governor’s January 7 emergency declaration.
Lara also called on insurance companies to stop any pending non-renewals or cancelations for properties in those areas, including any issued up to 90 days prior to January 7 and scheduled to take effect after the fires started.
"What this means is if you received the non-renewal from your homeowner's insurance company between October 9 or 27, essentially within 90 days, your insurance company should do the right thing and retain you as a policyholder," Lara explained.
The commissioner encouraged anyone in that situation – along with anyone without insurance – to call his office at 1-800-927-4357 and have the case reviewed.
Tips on filing an insurance claim
Insurance expert Karl Susman gave tips on how people can file a claim if they lost their house or business in the LA wildfires.
"This is what insurance is for," Susman said. "This is why you purchase it, this is why you’ve been paying for it, and now it’s time for the carriers to step up and do what they need to do."
First thing to do (after taking a deep breath) is file your claim sooner than later even if you don’t have 100% confirmation of what has happened.
"Start the process now," Susman said.
Residents impacted by the California wildfires may get inundated with calls from people offering to handle their claims for them, but it's important to work with the insurance company directly to start the claim process, rather than third-party adjusters.
"You get out-of-state adjusters who start making false promises or will make you commit to ‘Maybe you get 60% of the money you're entitled to, but you'll get it now.’ No. You're entitled to 100% of what your policy says you have, and that's your contract," Commissioner Lara told FOX 11 on Friday. "This is why we don't want people signing anything under duress."
Most insurance companies have a mobile app where you can file a claim. But affected residents can also call their insurance companies directly or contact them online.
Janet Ruiz, a spokesperson for the Insurance Information Institute, told FOX Business that some of the insurance companies will have mobile units in that area, and some will give out checks to use for their additional living expenses right away. Ruiz said they have also seen companies use debit cards rather than checks when they have mobile units on site in an area where there has been a wildfire. The Federal Emergency Management Agency (FEMA) uses debit cards as well.
When a person contacts their insurance company, they should make sure they have a copy of their policy or understand what it covers. Residents should also try to make a list to go through everything that is damaged with the adjuster.
Experts say it is also important to take photos of the damaged items, if it is safe to do so, and not to discard damaged items until your assigned insurance adjuster has completed their assessment.
If the adjuster isn't helpful, Ruiz said residents should ask for someone else who is higher up in the company to help them. If they still need help, they can contact the California Department of Insurance.
Experts also say you should keep all receipts for out-of-pocket expenses.
If your home burned down during a wildfire
Ruiz said residents whose homes have been totally destroyed by the fires will be the priority as they will typically have a claim inspection right away.
"Some inspectors will be able to use drones in the area to get an idea of the damage early on. That is very helpful to all the folks who are in need of help," she said.
When it's safe to go back to their home, Ruiz said residents should try to keep damaged items until an insurance adjuster is able to inspect and assess the damaged item, if possible. It is also very important to take pictures and videos of all the damage as soon as possible.
Any auto losses may be insured under comprehensive coverage on the auto policy, according to Ruiz.
While residents wait to return to their homes, their additional living expenses for when they have to live somewhere else are covered through insurance. It will also pay for food and temporary repairs, according to Ruiz.
What if you don’t have insurance
Commissioner Lara encouraged any fire victims without insurance to call his office directly at 1-800-927-4357 to see what could be done.
"For folks that may not have insurance, we're asking them to call our office. There are still resources and services that we can look at," he offered.
The Source: Information from this story came from the State Insurance Commissioner’s Office and the Insurance Information Institute, along with FOX Business. The Associated Press contributed background. This story was reported from Los Angeles.