Calif. Commissioner issues two notices to insurers to aid 2017 fire victims
Only 399 of the 5143 homes destroyed have been rebuilt. The Dept.'s actions intend to aid victims as delays continue.
Nearly two years later, survivors of the October 2017 wildfires in northern California are still facing delays in rebuilding from the devastating blazes that claimed 5,143 homes and caused more than $12 billion in losses across five counties. To date, only 399 homes have been fully rebuilt as labor shortages and other factors continue to delay construction.
On Wednesday, California Insurance Commissioner Ricardo Lara issued two new notices to insurers that intend to aid those affected by the fires.
The first notice to insurers requests they extend additional living expense (ALE) coverage by a full year to survivors whose additional living expense benefits will expire within months. ALE coverage typically includes food and housing costs, furniture rental, relocation and storage, and extra transportation expenses while a home is uninhabitable.
New state laws extended living expense coverage from 24 to 36 months, but these changes did not apply to survivors of the October 2017 fires.
Local officials say Sonoma County and the City of Santa Rosa have processed 2,814 permits for homes, comprising 55% of the 5,143 homes destroyed in the fires. Only a small fraction of these homes (399) have already been rebuilt.
In his announcement Tuesday night, Commissioner Lara urged insurers “to show good faith with their policyholders by extending living expense payments to those who have endured so many delays beyond their control.”
The second notice requests that insurers not deduct the land value when survivors who suffered a total loss choose to purchase a new home in a different location in order to ensure the amount homeowners should receive would not be reduced.
The deduction of the land value from the cost of purchasing a home at a new location has been a problem for some survivors.
California law allows those who suffer a total loss to utilize insurance to rebuild in the original location, rebuild in a new location, or to relocate to a replacement home. The Department said they have received complaints from policyholders who chose to relocate and say their insurer deducted the estimated land value of the new home from the overall replacement cost payment, leaving policyholders with less than the full amount of their benefits they would have been due if they rebuilt the home.
Lara added that allowing policyholders to purchase an already existing home without having insurers deduct the value of land will greatly help wildfire survivors throughout California rebuild their homes and lives.
The full notices can be found on the California Department of Insurance website.
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