California protects insurance coverage affected by Line, Bridge, Airport fires

Insurance Commissioner Ricardo Lara announced Monday, impending action to protect homeowners’ insurance policies affected by three major wildfires in Southern California.

Lara’s announcement follows Gov. Gavin Newsom’s emergency declarations for the Line Fire in San Bernardino County, the Bridge Fire in Los Angeles and San Bernardino counties and the Airport Fire in Orange and Riverside counties.

Under state law, once the perimeter of the fires is determined, Lara will issue a bulletin identifying areas in the immediate vicinity of the fires that will be protected by one-year protection from homeowners’ insurance non-renewal, or cancellation due to wildfire risk. 

Lara has protected insurance for approximately four million California households since 2019, state officials said.

“Wildfires are devastating both financially and emotionally, even if you don’t suffer property damage,” said Lara, who is implementing a Sustainable Insurance Strategy to address California’s insurance crisis. 

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“Keeping people covered in the aftermath of a wildfire emergency is essential as our long-term reforms take effect in the coming months. Insurance benefits can help people recover quickly and cover some of the additional costs if you have to evacuate from your home,” Lara said. “Once these fires are brought under control, we will be on the ground assisting survivors in person, enforcing California’s strong consumer protection laws as people recover.”

In August, Lara issued a one-year moratorium on insurance companies to preserve residential insurance coverage for more than 185,000 policyholders affected by the Park, Borel and Gold Complex fires, the Insurance Journal reported.

California wildfire evacuation, relocation costs

Lara reminds residents in Los Angeles, San Bernardino, Orange and Riverside counties, who have been ordered to evacuate due to the wildfires, that their homeowners or renters insurance may help with evacuation and relocation costs under Additional Living Expenses (ALE) coverage.

“ALE coverage typically includes food and housing costs, furniture rental, relocation and storage, and extra transportation expenses, among other costs,” the state said.

If you have any questions or need assistance, contact the California Department of Insurance at 800-927-4357 or insurance.ca.gov. 

Homeowners insurance policies

Many homeowners are unaware they may have coverage under their homeowners and renters insurance policies to help them with evacuation and recovery expenses.

In 2020, Lara sponsored a new law — Senate Bill 872 authored by Senator Bill Dodd — that requires insurance companies to pay at least two weeks of ALE benefits to evacuees and provide an advance payment for no less than four months of ALE without an itemized inventory form, among other consumer protections. 

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This consumer protection law removes barriers for disaster survivors to get critical insurance benefits and streamlines wildfire recovery processes for homeowners who suffer from a loss, the state said.

Here are some additional tips from the state for consumers:

• Keep all receipts during your evacuation.
• Policy provisions, including deductibles, vary by company, and residents should check with their insurance company or agent as soon as possible to confirm coverage, limits, and any other limitations and documentation requirements. 
• Most renter’s policies also typically include ALE coverage.
• Document the date, time, and names of any insurance company employees you speak to regarding your coverage.
• Consumers should ensure that any insurance agent or public adjuster offering their services has a valid license by checking online with the Department of Insurance.
• Download the department’s Top 10 Tips for Wildfire Claimants, which includes information about claiming ALE benefits.
• Public adjusters cannot solicit business for seven calendar days after the disaster.
• Don’t forget copies of insurance policies, important papers, and a photo or video inventory of your possessions. 
• An inventory can be completed quickly and easily on your smartphone and safely stored in the Cloud.

California’s insurance dilemma

In 2023, insurance industry brands began pulling back from California’s home insurance marketplace, saying that increasing wildfire risk and soaring construction costs have prompted them to stop writing new policies in the Golden State, the Associated Press reported.

Last year, State Farm officials said it would stop accepting applications for all business and personal lines of property and casualty insurance, citing inflation, a challenging reinsurance market and “rapidly growing catastrophe exposure.” The decision did not impact personal auto insurance, according to the Associated Press report.

By August 2024, seven of California’s largest property insurers, State Farm, Allstate, Farmers, USAA, Travelers, Nationwide and Chubb had limited new homeowners’ policies in California, raising questions about the stability of the California home insurance market, Bank Rate reported.

Bridge, Line, Airport fire updates

On Monday night, fire officials reported the Bridge Fire has burned 54,774 acres, with 35% containment. The fire destroyed 66 structure and damaged another 13.

The Line Fire had scorched 39,026 acres and was 49% contained. Authorities have identified three structures that were damaged and one that was destroyed.

The Airport Fire had burned 23,519 acres and was 31% contained. Additionally, 194 structures were destroyed and 34 damaged.

Daily Press reporter Rene Ray De La Cruz may be reached at RDeLaCruz@VVDailyPress.com. Follow him on X @DP_ReneDeLaCruz