California Insurance Commissioner Ricardo Lara on Wednesday issued an emergency notice to all property/casualty insurers doing business in California requesting they expedite claims handling for wildfire survivors to help them begin the recovery and rebuilding process more quickly.
“I have met with many wildfire survivors since taking office, and they need immediate help to start the rebuilding process, not red tape and unnecessary paperwork that adds to their problems,” Lara said in a statement. “These expedited claims handling procedures will give policyholders the help they need, and I urge insurers to do the right thing for these survivors.”
Lara’s request followed on order last week that the Fair Plan to begin offering a comprehensive homeowners (HO-3) coverage, in addition to its current dwelling fire-only coverage, by June 1, 2020. The comprehensive policy would include traditional homeowner insurance features such as coverage for personal liability, water damage and theft.
The insurers behind the Fair Plan, the insurance market of last resort for homeowners, called Lara’s idea misguided.
Lara’s request on Wednesday was to ask insurance companies to provide greater flexibility to survivors affected by wildfires across the state with some deadlines and documentation typically required to pay claims, including:
- Minimum four-month advance payment of Loss of Use, Fair Rental Value or Additional Living Expenses;
- Minimum 60-day billing grace period to allow for lost or destroyed renewal notices;
- Advance payment of at least 25% of policy limits for personal property — without the completion of an inventory;
- Accepting any inventory form that contains substantially the same information as a company-specific form;
- Accepting an inventory that includes groupings of personal property, such as clothing, shoes, books, or food items rather than listing individual item;
- Expediting payment of vehicle damage claims covered under comprehensive loss coverage;
- Cooperating with consolidated debris removal efforts coordinated through city, county, and state agencies, unless the insurer can provide more rapid debris removal outside of this effort.
The California Department of Insurance has issued similar notices after other devastating fires, including the Camp, Woolsey, and Hill fires in 2018.
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