Homeowners affected by California wildfires are getting a level of protection.
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The state on Thursday temporarily banned insurance companies from dropping customers in areas affected by more than a dozen recent blazes.
The new law provides protection homeowners in the wildfire-plagued state say they are being pushed out of the commercial insurance market.
The order comes from Insurance Commissioner Ricardo Lara.
The insurance industry has struggled to adapt to a series of record-breaking hurricanes and wildfires that have cost the U.S. $500 billion to clean up over the past five years.
The move will last for one year and it only covers people who live either inside or next to the perimeter of one of 16 wildfires that burned across the state in October.
The Department of Insurance estimates the moratorium will affect 800,000 policies covering millions of people in portions of Los Angeles and Riverside counties in Southern California and Sonoma County in the northern part of the state.
“People have been dropped by their insurance companies after decades,” Lara said. “This needs to stop.”
Lara also called on commercial insurance companies statewide to voluntarily agree to not drop homeowners' insurance policies for the next year solely because of wildfire damage. But insurance companies say climate change leading to more intense and frequent natural disasters is making it harder for them to stay profitable.
Destructive wildfires in 2017 meant California insurers paid more than $2 for every $1 they collected in premiums. In 2017, they paid $1.70 for every $1 in premiums, according to state officials.
Seven of the 10 most destructive wildfires in California history have happened in the last five years.
The Camp Fire in 2018 destroyed roughly 19,000 buildings and killed 85 people in and around the Northern California town of Paradise. That blaze alone generated more than $12 billion in insurance claims, according to the Department of Insurance.
Since 2015, state officials say insurance companies have declined to renew nearly 350,000 policies in areas at high risk for wildfires. That data does not include information on how many people were able to find coverage elsewhere or at what price.
Lara has the authority to order the moratorium under a bill he authored while in the state Senate last year that was signed into law by former Gov. Jerry Brown. The law took effect in January, and this is the first time regulators have used it.
The Associated Press contributed to this article.