PG&E sued over Camp Fire as insurance claims hit billions

Jan. 03--Three major insurance companies are suing PG&E over the billions of dollars in claims they expect to face from the Camp Fire.

The lawsuits, by Allstate Insurance Co., State Farm and USAA, represent another potentially staggering blow to PG&E, which has already acknowledged that problems occurred on a high-voltage transmission tower near the spot where the fire started Nov. 8. Multiple lawsuits have already been filed by Camp Fire survivors, and the company is under intense scrutiny by Cal Fire, the Public Utilities Commission and federal prosecutors.

Cal Fire is investigating and hasn't yet assigned any cause for the Camp Fire. But the insurance companies are laying the blame squarely on Pacific Gas and Electric Co., arguing the company did a poor job of maintaining its power lines, towers and other equipment.

"Plaintiffs have suffered damages caused by an act or omission of defendants," Allstate said in its lawsuit, filed Dec. 21 in Sacramento Superior Court.

State Farm's lawsuit accused PG&E of "failing to keep the power lines, wires, and any and all associated equipment in a safe condition at all times to prevent fires."

The wildfires of the past two years are putting property-casualty insurers under financial strain. A small San Joaquin Valley insurer, Merced Property & Casualty, was declared insolvent in early December because of Camp Fire claims. An industry-funded guaranty association will pay Merced Property customers for their losses, but by law can only pay up to $500,000 per claim.

The Camp Fire killed 86 people, making it the deadliest wildfire in California history, and is expected to generate billions of dollars in damages. About 90 percent of the housing stock in Paradise was destroyed, forcing the evacuation of the entire town of 27,000.

The insurers' lawsuits, filed Dec. 21, were first reported by the Sacramento Business Journal.

Besides civil claims, PG&E could also face criminal penalties over the Camp Fire and the deadly blazes that struck Santa Rosa and the wine country in October 2017. Federal prosecutors who secured felony convictions against PG&E after the deadly 2010 San Bruno pipeline explosion have said the fires could represent a violation of the terms of probation the utility received in the San Bruno case. PG&E has acknowledged that possibility as well. The consequences of a probation volation are unclear.

Xavier Becerra, California's attorney general, has said the utility could be prosecuted for murder in the Camp Fire case.

PG&E, asked about the insurers' lawsuits, said in an email, "Our focus continues to be on assessing our infrastructure to further enhance safety, restoring electric and gas service where possible, and helping customers begin to recover and rebuild. Throughout our service area, we are committed to doing everything we can to further reduce the risk of wildfire."

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