The most prominent insurance company in California, State Farm, made the announcement on Wednesday that it will provide policy renewals to residential subscribers who have been impacted by the terrible wildfires that have spread throughout Los Angeles County.
In the past, the corporation has intended to abandon a significant number of these policies.
The ruling made by State Farm is applicable to policies that are owned by homeowners, owners of rental properties, and residential community associations, which includes condominium associations.
Ricardo Lara, the Commissioner of the California Department of Insurance, expressed his delight at the news.
“I applaud State Farm for answering my call and setting the tone for all insurance companies to follow. All eyes are on insurance companies right now, including mine. I’ve asked State Farm and all insurance companies to answer my call to honor the policies they non-renewed in the areas I’ve protected by my moratorium powers, under my notice last week,” Lara stated in a statement.
“Insurers need to do the right thing and stand by their customers. We will keep working to ensure everyone’s claims are paid fairly, quickly, and completely.”
A one-year embargo prohibiting insurers from sending policyholders new cancellation or non-renewal notices was declared last week by Insurance Commissioner Ricardo Lara in reaction to the deadly wildfires.
Regardless of whether homes have experienced losses as a result of the fires, this ban is in effect. In order to give impacted policyholders further protections, Lara has also disclosed plans to broaden the moratorium’s application.
Notwithstanding these steps, the insurance commissioner lacks the power to cancel non-renewals that policyholders had already received prior to the moratorium’s implementation.
Homeowners who had previously received non-renewal notices prior to the implementation of the new protections have expressed worry about this restriction.
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State Farm made headlines earlier this year when it announced that it will discontinue about 42,000 commercial apartment policies and 30,000 property insurance policies throughout California.
This action came after the company decided in 2023 to no longer take new applications for personal and business property insurance in the state, indicating an increasing tendency among insurers to reduce their operations in California as a result of the threat posed by wildfires.
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Other insurance providers have not yet disclosed comparable intentions to provide consumers impacted by the flames with renewals. The decision by State Farm is a noteworthy exception, as no other insurers have yet to follow suit.
As they attempt to recover from the devastation brought on by the region’s continuous wildfires, many homeowners are left unsure about their insurance options.
