Can my insurer really drop my policy before a wildfire?
The flames hadn’t reached their home yet, but for one California family, the panic had already set in. Their grandparents, who lived in a high-risk wildfire zone, received a nonrenewal notice from State Farm in November 2024 — months before the Los Angeles fires ignited. Their coverage would expire in February 2025, and finding a replacement was proving nearly impossible. Then, disaster struck. As the fires raged nearby and mandatory evacuations were issued, they faced a terrifying reality: if their home burned, there was no guarantee they’d be able to rebuild.
Their story is one of many. Since 2019, more than 100,000 California homeowners have had their home insurance policies dropped, often with few options for alternative coverage. With insurers pulling out of fire-prone areas, thousands are left in limbo, wondering if their homes will survive not just the flames — but the insurance crisis, too.
Wait — can this actually happen?
You’ve paid your insurance premiums for years and done everything right — cleared brush, upgraded to a fire-resistant roof, followed every fire safety guideline — only to get a letter saying your policy won’t be renewed. Not because of anything you did wrong, but because an insurance company’s computer model decided your neighborhood is too risky.
That’s the reality for thousands of California homeowners.
For the homeowner above, the situation is even worse. They received a nonrenewal notice from their provider before a wildfire hit their area. When the fires came dangerously close, they looked to California’s fire insurance cancelation moratorium for protection — only to find a major gap that left them exposed.
Here’s how the moratorium works:
- If your insurance policy was active when a wildfire emergency was declared in your area, your insurer cannot cancel or refuse to renew it for one year. This gives homeowners time to recover without suddenly losing coverage.
- If your insurance company had already sent you a nonrenewal notice before the wildfire disaster, your policy can still expire when the notice period runs out.
- For homeowners in that gray area — who got a nonrenewal notice before the fire but whose policy is still active — the state is asking (but not requiring) insurers to pause nonrenewals for six months to help affected communities.
That last part is key: the six-month extension is not a guarantee.
So even if your home is still standing in a wildfire disaster zone, you could lose coverage entirely within months. Homeowners’ fates depend on whether their insurer chooses to grant an extension.
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Why are insurers leaving California?
It comes down to risk versus regulation.
Wildfire losses have surged in recent years, with disasters like the Palisades, Eaton and Hughes fires burning over 50,000 acres combined and leading to billions in claims. Insurers argue that California’s rate regulations prevent them from charging premiums that reflect the true risk, making certain areas unprofitable. Instead of adjusting rates gradually, some companies are choosing to exit entire regions altogether.
For homeowners, that means fewer choices, skyrocketing premiums and an increasing reliance on the California FAIR Plan, the state’s last-resort insurance option. However, FAIR Plan policies are often expensive and limited in coverage.
What are your rights if your policy is dropped?
California law requires insurers to provide advance notice before canceling or non-renewing policies:
| Scenario | Required notice |
|---|---|
| Policy nonrenewal | 75 days before expiration |
| Cancelation (excluding nonpayment) | At least 20 days before cancelation |
| Cancelation for missed payments | 10 days, depending on policy terms |
If you receive a nonrenewal notice, don’t wait until your policy expires to act.
- Start shopping immediately: Some private insurers still write policies in wildfire zones, though rates may be significantly higher. Find a few and compare your options to see which company can provide you the best rate.
- Work with a broker: Independent insurance brokers specialize in finding coverage for high-risk homes, often with access to carriers that aren’t widely advertised.
- Consider the California FAIR Plan: This state-backed insurer provides basic fire coverage but often requires a second policy for additional protections like theft and liability.
However, according to Bankrate insurance analyst Natalie Todoroff, “The main issue facing California homeowners isn’t nonrenewal timelines, it’s finding a new insurance company.”
California insurance regulations permit ample time, between 45 and 75 days, for you to find a new policy if and when your company drops you. But, if there's no other company willing to write you a policy — let alone an affordable one — that's when homeowners begin to run into trouble.— Natalie Todoroff, Bankrate insurance analyst
Bottom Line
California’s insurance market is shifting fast, leaving homeowners vulnerable to sudden nonrenewals, soaring costs and unreliable protections. Regulators are working on solutions, such as allowing insurers to price wildfire risk more flexibly, but these changes take time.
And this isn’t just a California problem. Other states facing climate-driven disasters — hurricanes in Florida, flooding in Louisiana — are seeing insurers retreat as well.
If you live in a high-risk area, don’t wait to explore your options. Review your policy, compare alternatives and prepare for potential changes before you’re put in a coverage crunch.
