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Can Insurance Companies Cancel Wildfire Insurance Policies?

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    A close up of an insurance policy with a pen, calculator, and a pair of glasses around the policy.

    The recent wildfires in Los Angeles, including the devastating Eaton Fire and the catastrophic blaze in Pacific Palisades, have not only left many residents damaged but have also led to a concerning trend of insurance policy cancellations. Due to the increased risk of wildfires, insurance companies like State Farm, Allstate, and Farmer’s Insurance have dropped or halted coverage for thousands of homes across California, and considering the extent of damage these wildfires have done, many are wondering if these insurance companies had a legal right to drop coverage right before these fires have occurred.   

    What Happens if My Home Insurance Gets Cancelled?

    If an insurance company cancels your homeowner’s insurance, your home and your belongings will no longer be protected against any damage that occurs. Even if you have paid your premiums, insurance companies are allowed to cancel certain aspects of your policy if there is an increased risk of it occurring. In any scenario, if your home insurance gets cancelled and your home is located in an area that is susceptible to natural disasters, you might need to find new coverage from private insurance companies or rely on the state’s FAIR Plan if private insurance isn’t available. However, if you do not decide to get a new home insurance policy after being alerted that your coverage is ending, you risk becoming vulnerable in a post-disaster situation such as a wildfire.

    While this may seem unlawful to do so, there are options homeowners can turn to, if your home insurance policy was canceled. California law provides robust protections for homeowners, particularly under California Insurance Code Sections 676.2 to 676.6, which governs when and how an insurer can cancel or choose not to renew a policy. Under these laws, insurance companies cannot cancel your homeowner’s insurance if:

    • You have paid your premiums on time.
    • You have accurately disclosed all relevant information about your property.

    The only legal grounds for cancellation include negligent factors such as non-payment of premiums, fraud, material misrepresentation, or in the instance of a significant increase in hazard or risk to the property in question.

    Has My Insurance Been Canceled Illegally?

    In order to determine if your home insurance was unlawfully canceled by your provider, you need to gather and provide evidence that your insurance company did not properly follow notification procedures to alert you about the chance in your policy. The best way to recognize an unlawful cancellation involves understanding the following:

    • Notice Period: California law mandates at least a 45-day notice for cancellations, except in cases of non-payment where a 10-day notice is allowed.
    • Reasons for Cancellation: If the reason provided doesn’t align with those legally permissible under California Insurance Code, the cancellation might be unjust.

    If your home insurance provider has unlawfully canceled your policy and you have sustained significant losses due to a natural disaster such as the California wildfires, you may be eligible to file a claim with California’s Department of Insurance or with an attorney to recover compensation for your losses.

    Legal Recourse for Wildfire Victims

    A woman sitting in front of her destroyed home.

    If you’ve suffered property damage due to the devastating fires in 2025 or any fire throughout L.A County and your insurance was canceled without a valid reason. You need to take swift action to ensure your chances of recovering what you lost. Here are the first things that you should do:

    • Review Your Policy: Ensure you understand what your insurance policy states regarding cancellations.
    • Documentation: Keep all correspondence from your insurer, including cancellation notices.
    • File a Complaint: Use resources from the California Department of Insurance to file a complaint about unfair practices.
    • Legal Action: If direct resolution isn’t possible, consider legal action for unlawful cancellation.

    The California Insurance Commissioner’s response to the LA wildfires included a moratorium on policy cancellations, highlighting the state’s commitment to protecting homeowners during emergencies. This can give affected wildfire victims an opportunity to recover what they lost despite some concerning news, however, it is vital to check if your area is included in the moratorium.

    When to Consult an Attorney for Assistance

    As losing your home to a wildfire is a traumatic experience, finding out that your home insurance provider can not do anything to help is even more devastating. While insurance providers cancelling policies may be technically legal in some scenarios, here are key scenarios where legal consultation becomes necessary:

    • Unjust Policy Cancellation: If your insurance was canceled without a valid legal reason.
    • Claim Denials: When your wildfire damage claim is disputed or denied.
    • Negotiation Breakdown: If discussions with your insurer do not lead to a fair settlement.

    It’s always best to try to avoid legal actions, as they can be costly, time-consuming, and ultimately a net negative. With that in mind, if you need any help dealing with your insurance company to recover compensation, it is always recommended to consult with an experienced attorney who can give you sound legal advice.

    West Coast Trial Lawyers Will Fight For Your Rights

    A row of attorneys from West Coast Trial Lawyers.

    At West Coast Trial Lawyers, we understand the heartbreak of losing your home to wildfires like the Eaton Fire or the Pacific Palisades Fire, compounded by the stress of an unlawful insurance cancellation. If you or someone you know has had their homeowners insurance unlawfully canceled, don’t hesitate to reach out. 

    Contact us today for a free consultation at (213) 927-3700 or use our online contact form to speak with our legal staff. We’re here to support you every step of the way.

    Frequently Asked Questions About Insurance Cancellations

    Can I Sue My Insurance Company for Canceling My Policy?

    If you believe your policy was canceled unlawfully, you might have grounds to sue. Legal action can be taken if your policy was canceled without a valid reason under California law, especially if you’ve adhered to all policy terms.

    Can You Get Insurance if Your Policy Was Cancelled?

    Yes, but it might be more challenging or costly. You might be relegated to state plans or need to prove risk mitigation to private insurers.

    Is California a Standard Fire Policy State?

    California does not mandate a “standard fire policy,” but it has specific regulations ensuring coverage for fire damage under most homeowner policies.

    What to Do if the Insurance Company Cancels Your Policy?

    • Understand Why: Ensure the reason is legally sound.
    • Seek Alternatives: Look for new coverage or state insurance plans.
    • Legal Advice: Consult with an attorney to explore your rights.
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