CDI Expands Moratorium on Policy Cancellations to Include ZIP Codes Impacted by Hughes Fire

At a Glance

• California has implemented a one-year moratorium on residential property insurance cancellations and non-renewals in wildfire-impacted areas, requiring insurers to comply with this rule and rescind any cancellations or non-renewals issued after January 27, 2025.

On February 25, 2025, California Insurance Commissioner Ricardo Lara issued Bulletin 2025-6, which enforces a one-year moratorium, starting on January 27, 2025, on cancellations and non-renewals of residential property insurance policies in ZIP codes impacted by the Hughes Fire. This Bulletin follows Governor Newsom’s emergency declarations on January 7, 2025, and January 27, 2025, which recognized the widespread wildfire damage in Los Angeles and Ventura counties.

The moratorium applies to all admitted and non-admitted insurers and prohibits policy cancellations and non-renewals due to wildfire risk for properties located within or adjacent to the fire perimeter.
 

Key Takeaways for Insurers 

• Insurers must adhere to California Insurance Code § 675.1 and SB 824, which prohibit policy cancellations and non-renewals in wildfire-affected areas for one year.
• Any cancellation or non-renewal notice issued after January 27, 2025, due to wildfire risk must be rescinded for policies in the affected ZIP codes.
• The CDI will closely monitor compliance and may issue supplemental bulletins adding more ZIP codes.
• Insurers may need to revisit risk models, reinsurance strategies, and premium structures to offset financial exposure.