If you own a home that has been damaged by smoke from a wildfire, don’t be surprised if your insurance coverage is insufficient or denied.
A new report from Consumer Watchdog alleges that insurers have inserted provisions into the fine print of their home, condo and renters insurance policies that allow them to limit or deny coverage after a wildfire.
Farmers, nationwide and the
The report says insurance companies are downplaying or denying claims as California’s wildfire season lengthens and becomes more damaging. The three most destructive years on record by the state were 2017, 2018 and 2020.
In a fact sheet published on Tuesday, the
The fact sheet adds that 20 insurers removed illegal smoke-limit policy provisions in 2018 after being notified by the department. He further noted that a Nationwide review had resulted in more than
A similar survey of the FAIR plan resulted in more than
Founder of Consumer Watchdog
“People pay into these policies year after year in the hope that they will never have to use them,” he said. “But when they do and they’re told they have no coverage, or they have very little coverage…it adds a financial and emotional burden to a wildfire disaster.”
“I’m not exaggerating,” he said. “They tell people, ‘Your house isn’t broken, it’s not damaged, so we’re not paying you anything.’ “
In a statement on Tuesday evening, the FAIR plan said it “takes seriously its commitment to ensuring that all
“We look forward to presenting the case of the FAIR plan and the facts of this case,” the statement said. “As this matter involves ongoing litigation, we have nothing further to add at this time.”
Based on a review of public records required by the
Limits on repairing smoke damage: Smoke is often the most common and costly result of wildfires. Insurance companies have adopted policy provisions that treat “smoke damage” as distinct from “fire damage” and limit compensation for smoke damage to an amount well below coverage. full policy in case of fire.
Arbitrary loss reporting triggers: State law only requires policyholders to report a loss in a timely manner. Instead of setting the reporting deadline based on the date of the loss, some insurance companies arbitrarily base the reporting trigger on another event, such as the “start date of the forest fire”, which can lead the company to refuse such a late claim.
Coverage Exclusions: These provisions state that a policyholder has no coverage for losses caused by a wildfire that occur within a certain period of time after purchasing the policy – usually 72 hours.
Assessment Prohibiting Lawsuit Provisions: These provisions prevent a policyholder from suing an insurance company in court for a claim dispute without going through a loss assessment process or after going through an assessment.
Consumer Watchdog claims that these provisions are illegal under
“I’m never surprised what an insurance company will dare to do,” Rosenfield said. “And it’s amazing to me that the
Consumer Watchdog said Lara should investigate all claims denied by insurance companies during and after the historic 2017 wildfires to determine whether they were handled legally, paying particular attention to claims involving damage caused by smoke.
They urge him to impose fines of