Commercial property insurance cancellation and nonrenewal.

Senators Pérez and Rubio, joined by five principal coauthors, propose extending California's wildfire-related insurance protections to commercial property owners through legislation that would prevent insurers from canceling or refusing to renew policies solely due to a property's location in or adjacent to wildfire-affected areas.

The measure establishes a one-year prohibition on insurance cancellations and nonrenewals for commercial properties within ZIP codes affected by wildfires following a state of emergency declaration. The Department of Forestry and Fire Protection, in consultation with the Office of Emergency Services, determines the fire perimeter, with the Insurance Commissioner then notifying insurers of the specific ZIP codes where the prohibition applies.

The bill maintains three exceptions to this prohibition: when property owners or their representatives engage in willful or grossly negligent acts that materially increase insured risks, when unrelated losses make the property ineligible for renewal, or when physical changes beyond fire damage render the property uninsurable. These provisions mirror existing protections for residential property insurance policies while expanding coverage to include commercial properties subject to Section 675.5 of the Insurance Code.