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California Insurance Commissioner Seeks to Speed up the Claims Process for Wildfire Victims

California is in the grips of yet another terrifying and destructive wave of lightning-caused wildfires as residents are forced to flee their homes in the midst of the COVID-19 pandemic.  Hundreds of families have lost their homes and possessions over the last 10 days.  Thousands more remain at risk of suffering the same fate as firefighters struggle heroically battle the various blazes raging throughout Northern and Central California.

According to CAL FIRE, there are more than two dozen major wildfires scorching Northern and Central California which have killed at least seven people and destroyed nearly 2,000 structures. Cooler weather over the last few days is helping firefighters obtain containment of the largest wildfires in state history sparked by lightning strikes.

Still, even with containment, thousands of homeowners, business owners, and displaced residents are now left to deal with restoring their lives and replacing their homes and possessions. Thankfully they are now getting some help from the state’s Insurance Commissioner who has issued an emergency notice to expedite the processing and payment of wildfire insurance claims.

Michael Kelly, the senior managing partner at the Walkup Law Firm, has seen this before, most recently in the 2017 and 2018 utility-caused wildfires in Northern and Southern California. “If ever there was a time that fire and casualty insurance companies were required to act promptly and in the best interests of their insureds, this is such a time,” says Kelly.

In an order directed to insurers, Commissioner Ricardo Lara has urged all property/casualty insurance companies with policyholders in the state to expedite claims involving wildfire survivors. “A similar approach was taken in 2017 and 2018 by the insurance commissioner at that time,” commented Kelly.  “It helps fire victims immeasurably to know that the state’s enforcement agency is proactively encouraging and requiring insurers to act promptly and in good faith.”

The emergency order is intended to speed up the claims handling process to help wildfire survivors recover from this devastating event and rebuild their lives and homes more quickly. Lara is requesting insurance companies to provide more flexibility in handling procedures and extend the billing grace periods to help residents and businesses recover in a timely manner.

The Commissioner has outlined these adjustments to procedures that will assist policyholders:

  • A Billing Grace Period: Minimum 60-day billing grace period to allow for lost or destroyed renewal notices
  • Loss of Use, Fair Rental Value or Additional Living Expenses: Minimum four-month advance payment
  • Personal Property: Provide advance payment of at least 25% of policy limits for personal property — without the completion of an inventory form
  • Inventory Forms: Must accept any inventory form that contains substantially the same information as a company-specific form
  • Inventory Itemization: Must accept an inventory that includes groupings of personal property, such as clothing, shoes, books, or food items rather than listing each individual item
  • Vehicle Claims: Expedite payment of vehicle damage claims covered under comprehensive loss coverage
  • Debris Removal: Insurers must cooperate with consolidated debris removal efforts coordinated through the city, county, and state agencies unless the insurer can provide more rapid debris removal outside of this effort

It’s emotionally and financially devastating to lose a home and belongings in a wildfire. The process of itemizing everything you’ve lost and putting a price on personal possessions can be exhausting and traumatizing. By relaxing rules for itemizing lost items and giving policyholders more time and more flexibility, property and casualty insurance companies can alleviate some of the stress during this difficult time.

The Walkup Firm is a leader in wildfire litigation and is dedicated to helping victims recover losses. The Walkup team of attorneys is headed by Michael A. Kelly, Khaldoun Baghdadi, Andrew McDevitt, and Max Schuver. These lawyers have led the legal fight against the nation’s largest investor-owned utility PG&E, for damages to residents of six North Bay counties and Butte County caused by the utility triggering Northern California wildfires. The PG&E bankruptcy case, concluded recently on behalf of wildfire victims, was the largest Tort Bankruptcy in U.S. history – with overall payment to victims totaling $13.5 billion.

The Walkup team understands the obligation of insurance companies to deal fairly with their insureds. They help clients make sure that insurance carriers fulfill the promise of putting their insureds in “good hands”.

Written on behalf of The Walkup Firm

September 8, 2020