The wildfires in California in 2017 were devastating, but almost worse were the mudslides that followed. Insurers doing business in California were aware that they would be facing significant losses and thousands of claims, but the magnitude of the damage only became available recently.
According to California Insurance Commissioner Dave Jones, as of March 31, 2018, insurers have received over 2,000 insurance claims totaling more than $421 million in losses from the Montecito mudslide. More than 400 homes and businesses were destroyed or damaged, and 21 people died as a result.
Jones issued a formal notice to all property & casualty insurance companies on Jan. 29 reminding them of their duty to cover damages from the recent mudslides and debris flows. The notice acknowledges that homeowners' and certain commercial property insurance policies frequently have exclusions for losses from mudflow, debris flow, mudslide, landslide or other similar events.
|'Efficient proximate cause'
Under California insurance law, the exclusions are not enforceable if the facts establish that the wildfire, which is a covered peril, was the “efficient proximate cause” of the subsequent flowing, mudflow, debris flow, mudslide, landslide, or other similar events.
Jones also stated in his notice that there is substantial evidence that the recent fires in California were the efficient proximate cause of the mudslides. In particular, the Thomas Fire burned the vegetation on the mountains above Montecito, resulting in a downpour of soil and debris on the houses below when heavy rains arrived.
“Recovering and rebuilding lives, homes and neighborhoods will take time and it will be difficult. We will continue to do all we can at the Department of Insurance to help residents navigate the claims process and recover,” said Jones in a statement.
The department is encouraging residents and business owners in Santa Barbara and Montecito areas affected by the recent disasters, to file a claim with their insurance company. If consumers have issues navigating the claims process, or they think their claim was wrongfully denied they are encouraged to contact the Department of Insurance, 800-927-4357 or online at www.insurance.ca.gov for assistance.
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Denny Jacob
Denny Jacob is an associate editor for NU PropertyCasualty360. Contact him at [email protected].
