After losing homes in the Thomas Fire, the next challenge is insurance

Jan. 27--Carl Zaid wasn't sure how to tell his wife their house had just burned to the ground, so he did it with the help of a flamingo.

Her name was Miss Pink, and she was perched in her usual spot in the front yard the night the family fled as flames approached from the canyon behind them.

And she was there the next day, singed but still standing, when Zaid and his two daughters came back to find their house a heap of concrete, rubble and countless screws. Christmas lights straddled the mailbox.

Zaid called his wife. He broke the news.

"Miss Pink's feathers are a little ruffled, but guess what -- she's looking for a new home," he said.

Losing the Ventura home they moved into almost 40 years ago was hard. Really hard.

Finding out their insurance won't come near to covering the cost of rebuilding has begun to feel like an equally devastating blow.

Standing recently on dirt and next to slabs of old wall and roof that used to be home, Zaid said it has been a three-step process working with State Farm, his insurer.

"Stage 1 is the friendly stage. Stage 2 is the 'Who said that? I'm not quite sure. Let me check on it,'" he said. "Stage 3 is the 'no' step. 'No, no, no.' Then you've got yourselves a battle."

If the Thomas Fire is like other recent major disasters in Southern California, most who lost homes will soon learn their insurance money won't go nearly as far as they thought. By how much depends on an individual policy, but hundreds of people could end up in the position of not being able to rebuild without significant out-of-pocket spending. Or, as in the case of Zaid, not without a fight.

Underinsured more often than not

United Policyholders hosted a workshop this week geared

United Policyholders hosted a workshop this week geared at educating homeowners on their insurance policies. (Photo: CONTRIBUTED IMAGE/UNITED POLICYHOLDERS)

There are many reasons a person may be underinsured, but many of the problems stem from the complicated ways the policies are written in the first place, said Amy Bach, co-founder and executive director of United Policyholders, a nonprofit consumer advocacy group.

"When the wrapping comes off the box, there you are with the product, and it turns out it's nothing like it's advertised," Bach said. "It's a cold, hard, legal contract that was written by lawyers to protect the insurance companies' interests."

The group advocates for clearer policies that disclose what adequate coverage, to include rebuilding the same structure to current code, would cost.

"They should at least go in with eyes open," Bach said.

A State Farm spokesperson said the company is focused on working with its customers through the recovery process.

"While we cannot discuss claim specifics with third parties for customer privacy reasons, I can tell you that we are currently actively working on this claim," regional State Farm spokesperson Sevag Sarkissian wrote in an email.

In general, coverage amounts are selected by customers, who are advised to check their policies annually and make any necessary changes, he said. Sarkissian said once a policyholder receives an estimate from State Farm after a loss, they can counter with their own estimates.

About 60 percent of U.S. homes are underinsured by 20 percent, according to CoreLogic, an Irvine-based company that provides data to most major home insurers.

In Ventura County's expensive housing market, that difference could mean big dollars. The owner of a $900,000 Ondulando home in that scenario, for example, would need $180,000 to rebuild.

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