California Consumer Alert Department of Insurance

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Commissioner Lara issues landmark regulation to expand insurance access for Californians amid growing climate risks

Commissioner Lara enforces groundbreaking regulation to expand insurance coverage in wildfire-prone areas.

Commissioner Ricardo Lara today announced the enforcement of California’s first catastrophe modeling regulation, a key element of the Department of Insurance’s Sustainable Insurance Strategy.

• The regulation requires major insurance companies to increase coverage in wildfire-prone areas, offering homeowners and businesses greater options and market stability.
• For the first time, catastrophe models must account for wildfire mitigation efforts, ensuring recognition of billions invested in community safety measures like home hardening.
• The Department will begin accepting model applications starting January 2, 2025, with the regulation set to reshape insurance coverage in the coming months.

The regulation has earned strong support from local leaders, consumer advocates, environmental organizations, agricultural representatives, and fire safety experts, all emphasizing its innovative approach to expanding insurance coverage and recognizing wildfire risk mitigation efforts. 

Following a Governor declaration of a state of emergency, the Department of Insurance partners with CAL-FIRE and the Governor’s Office of Emergency Services to identify wildfire perimeters and adjacent ZIP codes within the mandatory moratorium areas. The protection from cancellation or non-renewal lasts for one year from the date of the Governor’s emergency declaration.

This one-year protection applies to all residential policyholders within the affected areas who suffer less than a total loss, including those who suffer no loss. Those who suffer a total loss have additional protections under the law.