CDI Settles Enforcement Action Over Wildfire Claims

September 26, 2012

The California Department of Insurance has settled with the New Hampshire Insurance Company and its authorized agent York Risk Services Group Inc. for claims processing.

The $285,000 settlement is a result of New Hampshire Insurance Company and York Services Group Inc. handling of claims related to the 2008 Sayre Fire in Sylmar, Calif. New Hampshire Insurance Company is a subsidiary of AIG.

“I am committed to ensuring that insurers and administrators processing claims on consumers’ behalf adhere to the requirements of the California Insurance Code,” said Commissioner Dave Jones. “We expect insurers and their agents to be thoroughly diligent in handling claims, especially as a result of the devastating losses caused by the Sayre fire.”

The Sayre Fire, which occurred on Nov. 14, 2008, led to the loss of 489 residences, including 480 mobile homes, and the destruction of more than 600 structures overall. During the fire, more than 11,000 acres were burned. The 480 mobile homes destroyed in the fire were located in the Oakridge Mobile Home Park, which before the fire, housed 600 mobile homes. The New Hampshire Insurance Company issued Mobile Homeowners Policies to approximately 370 policyholders whose homes suffered total losses as a result of the firestorm.

In 2009, CDI acted on complaints from Sayre Fire survivors relating to disputes over how much extended replacement cost coverage was available under the New Hampshire Insurance Company policy. CDI was able to secure an additional 110 percent or 125 percent of fire insurance coverage for most policyholders. This action resulted in approximately $10.8 million in increased payments to the Sylmar fire victims.

In the ensuing months, CDI’s Claims Services Bureau received a number of complaints from New Hampshire Insurance Company policyholders regarding claims handling. The settlement action is based on these alleged claims handling violations.

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