Newsom Signs Local Assemblymember’s Bill Extending Insurance Protections After Declared Disasters

Gov. Gavin Newsom has signed a bill by Altadena’s assemblymember, John Harabedian, that lengthens protections against losing homeowners insurance after a declared disaster. Harabedian’s office says the law takes effect Jan. 1, 2027.

Harabedian, a Pasadena Democrat, has tied the measure to the Eaton Fire. The governor’s office listed AB 2038 among the bills Newsom signed Wednesday, Sept. 30.

Existing law bars insurers from canceling or refusing to renew a residential policy for one year after a declared state of emergency if the property is in a ZIP code within or adjacent to a fire perimeter. That rule applies when the decision is based solely on the home’s location in an area where a wildfire occurred. AB 2038 extends the period to two years, according to the digest.

When a primary home is a total loss and certain conditions are met, including that a disaster caused the loss, existing law requires the insurer to renew the policy. The renewals must cover at least the next two annual renewal periods and no less than 24 months from the date of the loss. The new law raises that to at least three renewal periods and no less than 36 months.

After the Eaton Fire, the state Department of Insurance applied the existing one-year rule to 31 ZIP codes it identified as within or adjacent to the fire’s perimeter. Its bulletin barred insurers from issuing cancellation or nonrenewal notices due to wildfire risk for one year starting Jan. 7, 2025, the date of Newsom’s emergency declaration.

That moratorium had ended by Feb. 18, 2026. At an Assembly Insurance Committee hearing that day, Harabedian said his office was hearing anecdotal reports of nonrenewals in Altadena and the Palisades, according to a transcript published by CalMatters’ Digital Democracy. A Department of Insurance official replied that the department watches for surges in nonrenewals after moratoriums end and had not seen that happen in particular areas. Insurance Commissioner Ricardo Lara noted that homeowners with a total loss had 24 months of protection.

For homes destroyed in January 2025, that 24-month minimum runs to January 2027, the month AB 2038 takes effect. The digest does not address whether those homeowners gain the longer 36-month protection.

Harabedian addressed the timing himself at a June 10 Senate Insurance Committee hearing. He told senators that by the time the bill took effect, many of his constituents and neighboring constituents would already have been nonrenewed, according to Digital Democracy’s transcript. He said the bill would benefit the senators’ districts more than his own and, in his view, protect the state as a whole more than survivors of the Eaton and Palisades fires.

“We saw that clearly after the Eaton Fire, but this is not just an Altadena issue,” Harabedian said in a statement released by his office Sept. 30. “Wildfires are affecting communities across California, and our laws need to protect families wherever disaster strikes.”

Insurance industry groups opposed the bill at the June hearing, according to the transcript. A representative of the American Property Casualty Insurance Association argued that longer moratoriums would further limit insurers’ ability to manage their exposure and could accelerate pullbacks from California’s homeowners market. A representative of the Personal Insurance Federation of California said the group did not object to more time for people rebuilding, but opposed extending the extra year to undamaged homes near a declared disaster.

Harabedian told the committee that the bill keeps the ZIP-code approach set by Senate Bill 824, a 2018 law written by Lara when he was a state senator, and only lengthens its timelines. The committee advanced the bill 4-0. The digest of the final version still applies the two-year protection to ZIP codes within or adjacent to a fire perimeter.

Assemblymember Rick Chavez Zbur, D-Hollywood, is the bill’s joint author. Harabedian’s office said the protections apply to qualifying disaster-affected properties across California and are not limited to the Eaton or Palisades fires.