Insurers Agree To Increase Payments Without Itemization For California Wildfire Losses

Jan. 18--Under pressure from state Insurance Commissioner Dave Jones, many insurance companies have agreed to make additional payments for personal property lost in the North Bay fires without requiring policyholders to fill out a detailed inventory.

Jones called on insurers last month to provide North Bay fire victims up to 100 percent of their personal property coverage limits without itemizing their losses, citing the emotional and physical toll that fire victims were undergoing. He asked them to reply by Jan. 8 on whether they would comply with his request.

Thirty-four insurers responded to his office and said they would pay at least 50 percent or more on claims for personal property losses without an itemized list.

Ten carriers said they would offer less than 50 percent or did not agree to make any policy changes. Three companies did not respond to Jones' request.

The department said carriers that have bumped up their coverage represent 97 percent of the total loss claims from the fires, the costliest in American history with about $9 billion in insured losses.

In the immediate aftermath of the fires, most insurers reached a voluntary agreement with Jones to advance at least 25 percent of their personal property coverage without itemization to quickly help fire victims rebuild their lives.

But Jones pushed for them to do more given the unprecedented circumstances of the October fires. In Sonoma County, there were $7 billion in claims, according to the department, including claims for 4,785 insured homes destroyed in the fires.

Jones said he was moved to act as his department heard that some carriers were paying out 100 percent for personal property without itemization. Some policyholders of CSAA Insurance Group, for example, reported receiving a complete payout for personal property without an inventory. CSAA last month said there has been no policy change on how it handles personal property claims, though it acknowledged "there was some miscommunication" that might have led some of its policyholders to believe there was a policy change.

"We know some of the insurers have done this (100 percent) and I concluded they could and should do it," Jones said in a interview Wednesday.

The department said many insurers have agreed to pay at least 75 percent of personal property coverage limits without a list and some have even agreed to 100 percent. It declined to release a list detailing insurers' responses to its survey, saying the responses were confidential and not covered under the California Public Records Act.

The 34 carriers who pledged to provide at least 50 percent or more include State Farm General Insurance Co., Farmers Group (including Foremost), CSAA, Liberty Mutual/Safeco, Allied/Nationwide, USAA, Travelers, Allstate, Encompass, Hartford, California Capital, Homesite, Chubb, Auto Club of Southern California, American Modern, Aegis Security, National General, Mercury, AIG, Ameriprise, QBE, FAIR Plan, TOPA, Universal North America, First American Title, Western Mutual, Wawanesa, Stillwater Insurance, Horace Mann, Kemper, Cincinnati, Hyundai, AMICA Mutual and MAPFRE.

The 10 who answered less than 50 percent or made no changes were Grange, Assurant, California Casualty, American Global, Zenith, Electric, American National Finance Group, Metropolitan, Oregon Mutual and Civil Service Employee Group. Pacific Specialty, Progressive and Armed Forces Insurance Exchange did not respond to the request Wednesday.

Policyholders are encouraged to reach out to their insurance agent to determine whether their carrier has agreed to increase the content payment, Jones said. They can also contact the department at 800-927-4357 if they experience trouble with their claims.

State Farm, for example, has started sending letters to some policyholders. The company is one of the 10 largest property-casualty insurers in the North Bay.

"Given the extraordinary circumstances, provisional measures are being put into place to further help our customers process their wildfire claim and get back on their feet. We encourage customers to speak to their claim team member or their agent for more information specific to their individual claim," State Farm said in a statement Wednesday night.

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Jon Ward, who lost his Fountaingrove house in the fires, said Travelers informed him earlier this week that it would increase its payout from 30 percent to 50 percent for personal property loss reimbursement without itemization. "This (public pressure) has pushed them to do this," Ward said of the increase.

Jones noted that he could only use his bully pulpit to request the changes because he does not have the authority under state law to require insurers to comply with the request.

But North Bay lawmakers are looking to apply further pressure against expected industry opposition.

State Sen. Mike McGuire, D-Healdsburg, has sponsored legislation that would require carriers to pay out at least 80 percent of the maximum limit under a homeowner's personal property coverage without requiring policyholders to itemize their losses. The bill, AB 897, would apply retroactively to local fire victims.

McGuire said he was moved to act after hearing "horror stories" from constituents of having to relive the fires while compiling the inventory list.

He added that many policyholders are receiving between 60 to 80 percent of personal property claims without any itemization -- and at least one providing 100 percent -- and he wanted to establish a fair baseline for all fire victims.

The department noted that there may be exceptions to the recent pledges by the insurers. For instance, insurers may not provide such relief if the house had no contents and was in escrow during the fires.

State law does not require uniformity in coverage for personal property, and many policies tie that specific coverage limit to a certain percentage of the overall dwelling coverage.

Jones said that could result in some policyholders from one company receiving a higher payout for personal property claims even though their carrier ends up paying a lesser percentage than one of its rivals.

Editors' note: Story has been updated to include a response from a fire victim and full company name for State Farm.

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