What happened: AB 2038 extends California's post-wildfire moratorium on residential insurance cancellations from one year to two and increases total-loss renewal guarantees from 24 to 36 months.
Who's involved: California residential property insurers, the California Department of Insurance, Cal Fire, and the Office of Emergency Services.
What's at stake: Renewal and nonrenewal timelines for every residential property policy in or near a wildfire-affected ZIP Code.
Why it matters: Carriers and MGAs writing California residential risk need to update nonrenewal workflows, ZIP Code monitoring systems, and renewal calendars.
Where it stands: Signed into law September 30, 2026.
A homeowner whose house burns down in a California wildfire just got an extra year of guaranteed insurance renewals.
Governor Gavin Newsom signed Assembly Bill 2038 on September 30, pushing the state's post-wildfire protections for residential property policyholders further than they have ever gone. Assemblymember Harabedian authored the bill, which amends Section 675.1 of the California Insurance Code.
Two changes matter most for property insurers writing California residential risk.
Previously, insurers had to offer renewal for at least two annual periods - no less than 24 months - after a disaster-related total loss to a primary insured structure. AB 2038 stretches that to three annual periods and no less than 36 months. The renewal obligation kicks in only where the total loss was caused by a declared disaster, the policyholder was not negligent, and no subsequent physical or risk changes have made the property uninsurable.
An extra 12 months means an extra renewal cycle that carriers cannot walk away from.
The law also doubles the ban on cancellations and nonrenewals for properties in ZIP Codes within or adjacent to a fire perimeter. Under the old rule, insurers could not cancel or refuse to renew solely because a property sat in a wildfire-affected area for one year after a state of emergency declaration. That window is now two years.
Every residential property policy in effect at the time of the declared emergency is covered. Cal Fire determines the fire perimeter in consultation with the Office of Emergency Services, and the Insurance Commissioner issues a bulletin listing the affected ZIP Codes.
None of this is blanket. Insurers can still cancel or nonrenew where the policyholder's willful or grossly negligent acts materially increased the risk, where unrelated losses make the risk ineligible, or where physical changes beyond the catastrophe damage make the property uninsurable.
AB 2038 builds on the framework that Senate Bill 824 created in 2018, which first introduced the one-year moratorium. The Legislature's own finding: recovery and rebuilding after a catastrophic wildfire "routinely takes multiple years," and shorter timelines left homeowners exposed mid-rebuild.
Carriers and MGAs with California residential books will want to update their nonrenewal workflows, renewal calendars, and ZIP Code monitoring systems tied to Commissioner bulletins before the new windows apply.
