The wildfires currently burning in Los Angeles County have brought attention to California's ongoing insurance crisis. State Insurance Commissioner Ricardo Lara has outlined steps that residents can take to expedite the claims process in the wake of these devastating fires.
One crucial step is for residents to obtain a complete copy of their insurance policy. Additionally, it is important to keep track of any additional expenses incurred during the fires, such as hotel stays or other living costs, and to retain receipts for all expenditures. Documenting all conversations with insurance agents or adjusters is also recommended to ensure clarity throughout the claims process.
For those who did not evacuate, Lara advises taking photographs of their homes, focusing on valuable possessions. In cases where individuals do not have insurance coverage, officials are working to provide assistance through state programs or federal disaster relief streams like FEMA.
Insurers in California have been hesitant to underwrite new policies in areas deemed high-risk for wildfires, leading to a significant number of homeowner policy non-renewals. Between 2020 and 2022, insurance companies declined to renew 2.8 million homeowner policies in the state, including 531,000 in Los Angeles County.
Lara acknowledges that the wildfires have further complicated an already intricate insurance landscape in California, exacerbated by extreme weather events. As a result of homeowners losing coverage or facing unaffordable premiums, many have turned to the California FAIR plan, a state program designed to provide coverage in high-risk areas.
Lara highlights ongoing reforms aimed at reducing reliance on the FAIR plan while ensuring the viability of private insurance companies. One key reform involves granting private insurers access to catastrophe modeling tools with a commitment to providing coverage to high-risk communities.
Lara emphasized the importance of holding insurance companies accountable for fulfilling their obligations to policyholders by promptly processing claims and delivering the services promised. The state is committed to addressing the challenges posed by the insurance crisis and extreme weather events in California.
