A year later, majority of North Bay fire victims still await reimbursements from home insurers to rebuild

Oct. 07--Consider the unfortunate plight of Laney Wall and Scott Rooks. They were married Sunday but remain unable to start building a new house to replace their Santa Rosa home that burned down in last October's wildfire. The two are Air Force veterans who served in the Iraq War and are longtime home insurance policyholders of USAA, an insurer catering to military families.

When they bought their home in the Fountaingrove neighborhood four years ago, the couple said they were assured by a USAA agent that $551,000 of insurance to cover the structure would be enough to rebuild in the case of a disaster. Now they find themselves in limbo at a Healdsburg rental house, because they figure they're short $1.4 million of coverage in order to rebuild. They'll take their case to mediation on Thursday, making a bid to get more money from their insurer.

"It's devastating," said Wall, who finished law school in the spring at UC Hastings College of the Law and took the bar exam this summer. "That was my entire life's savings in the house."

The couple's experience offers a stark example of the crucial role adequate home insurance plays in rebuilding after the historic Tubbs fire a year ago. And it highlights why most fire survivors in Sonoma County still struggle to rebuild.

To be sure, permitting delays, construction labor shortages and price increases for building materials all factor into rebuilding timelines. Insurance payouts, however, are pivotal in determining whether people have enough money to build a new home after a disaster. One year after the fierce wildfires, fewer than 50 homes of the more than 5,300 destroyed in the county have been fully rebuilt. Insurers' delays in paying homeowners' claims are the main reason for the slow rebuilding effort, officials said.

"We're still very much in the recovery process," said California Insurance Commissioner Dave Jones. His office reported there are $7 billion in residential insurance claims from Sonoma County as a result of the devastating fire, with about $5 billion of them paid by insurers as of mid-May. Those numbers, however, likely do not reflect the true cost of rebuilding at today's prices, experts say.

"There continues to be issues and disputes between homeowners and (insurance) companies" over things like replacement-cost coverage, Jones said.

In fact, across the North Bay, 53 percent of the thousands of fire victims still have not settled with their insurers regarding dwelling coverage to get fully reimbursed for their property damage, according to a new survey by United Policyholders, a San Francisco-based nonprofit consumer advocacy group focused on insurance matters. More than 500 local fire victims responded to the survey.

Even more troubling is that 66 percent of survey respondents reported they will be underinsured on their homes, according to the survey, jeopardizing whether those victims will have enough money to rebuild or be forced to sell their lots and move.

"I consider it a crisis," said Ken Klein, a California Western School of Law professor and expert on natural disasters, of the number of underinsured North Bay homeowners. Klein estimated 80 percent of U.S. homeowners are underinsured by at least 20 percent or more to replace their homes after a total loss.

California lawmakers have grappled with the thorny issue of underinsurance for decades, going back to the aftermath of the 1991 Oakland Hills fire when insurance companies moved away from home policies with guaranteed replacement cost coverage. After subsequent fires such as the 2003 Cedar and 2007 Witch wildfires in San Diego County, legislators made only incremental progress in solving the problem, said Klein, whose home was destroyed in the Cedar fire.

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