Santa Cruz Mountains Wildfire Victims Face Insurance Challenges

Sep. 1--BOULDER CREEK -- As wildfire evacuation orders for some lesser-effected parts of Santa Cruz County continue to fall, some residents facing the worst impacts from the CZU August Lightning Complex fire remain in the dark about their property losses.

Stirring additional unease, many are facing homeowner insurance company-imposed timelines without the ability to prove damages. Several resident-created Facebook groups have sprung up in recent weeks, specific to the local wildland fire and each insurance company and allow participants to trade tips and experiences. Requests for emergency officials and others who have made it behind evacuation lines to photograph people's property for them abound.

Santa Cruz County-based architect Stephanie Barnes Castro shared her recent experience working with a client whose home had been destroyed in a fire. The client's insurer encouraged her to accept a partial-payment insurance check before it was needed, saying the client would want it soon. The catch, Barnes Castro said, is that by accepting that first payment, a finite timeline for recouping expenses from the insurer is initiated. If new contractor costs arise after the end of that timeline, the property owner has no recourse for seeking additional funds, she said. That concern is particularly challenging in the rural San Lorenzo Valley area, where there are complicated issues of geology and soil quality that will require consultant expertise -- for hundreds of homes.

"Because of due process, it's inevitable that this is going to take people twice as long as usual," Barnes Castro warned victims of the CZU complex fires.

Meanwhile, residents still under mandatory evacuation are beginning to run through their allotments of homeowner insurance covering living-expense costs. The Santa Cruz County Emergency Operations Center has created a free hotel program hotline at 831-454-2181 for CZU August Lightning Fire Complex evacuees. Funding for the hotel vouchers is managed by the State Department of General Services and supported by the Federal Emergency Management Agency.

Even prior to last month's series of wildfires across the state, insurers canceling homeowner insurance policies in high fire-risk areas has become an increasing trend, inciting Insurance Commissioner Ricardo Lara in December to initiate a one-year moratorium on fire insurance policy cancelations in areas where wildfires struck the state in 2019. Lara also asked insurers to voluntarily refrain from canceling policies in other generally fire-prone areas. Last week, he renewed his plea to insurers while urging the industry to expedite claims for victims of this summer's rash of wildfires.

Senate Bill 872, authored by Sen. Bill Dodd and sponsored by Lara, codifies most of the consumer protections urged by Lara, including the advance payment of no less than 25% of a policy limit for lost contents without submission of an inventory form. The bill also expands the scope of additional living expense coverage in homeowners' insurance policies after a declared wildfire emergency and clarifies policyholder rights if the policyholder decides to relocate rather than rebuild the destroyed home. The bill recently passed out of state Legislature and is awaiting the signature of Gov. Gavin Newsom.

Existing state insurance codes, including provisions under 675, prohibit an insurer from canceling or refusing to renew a residential property insurance policy for property located in any ZIP code within or adjacent to the fire perimeter for one year after the declaration of a state of emergency, based solely on the fact that the insured structure is located in an area in which a wildfire has occurred. The prohibition applies to all residential property insurance policies in effect at the time of the declared emergency. That code applies to undamaged properties and partial losses.

Additionally, for situations involving the total loss of the primary insured structure, the insurer is mandated to offer, for at least the next two annual renewal periods to renew the policy if the loss to the primary insured structure was caused by a disaster, was not also due to the negligence of the insured

In an effort to ease the impacts of local fire damage, Newsom declared on Aug. 18 a state of emergency, including Santa Cruz County, related to the wildfires. Then, President Donald Trump declared on Aug. 22 a major disaster in California, accompanied by federal aid to supplement recovery efforts in the areas affected by wildfires beginning on Aug. 14 and continuing.

The California Department of Insurance has resources available for wildfire survivors. Those seeking assistance should contact the department at 800-927-4357 or at insurance.ca.gov. Lara also has staff at a booth at the Santa Cruz County Resource Recovery Center, along with representatives from the county, state and federal government, the American Red Cross and other local agencies. The center is open daily from 11 a.m. to 7 p.m. at the Kaiser Permanente Arena, 140 Front St., Santa Cruz.

Locally, county officials have created an evacuee hotel program hotline at 831-454-2181 for:

--Evacuees already placed at a hotel may call to renew their seven-day reservation if they are within 24 hours of their reservation's check-out date.

--Current evacuees not yet placed at a hotel may apply for the program.

--General program questions.

--Once an evacuation order is lifted, you will be required to check out of your hotel the following morning even if your seven-day reservation has not expired.

--Evacuation order map: tinyurl.com/y3zc8hpt.

IF YOU GO

--What: Virtual Town Hall on Wildfires Assistance and Insurance Resources.

--Who: Cal Office of Emergency Services Director Mark Ghilarducci, state Insurance Commissioner Ricardo Lara and United Policyholders Executive Director Amy Bach.

--When: 1:30 p.m. Friday.

--Where: Zoom: tinyurl.com/CDIwildfire, Facebook Live: Facebook.com/insurancecagov, Phone: 215-446-3649 or 888-557-8511, conference code: 832767.

--Questions: Email to [email protected] with "Wildfire" in the subject line by noon Wednesday.

--Information: insurance.ca.gov and 800-927-4357.

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