2017 Railroad Fire in Madera and Mariposa Counties
Credit: Madera County Sheriff's Office

Insurers increasing amount of payout without itemization have 97 percent of total loss claims from 2017 wildfires 

January 19, 2018 - SACRAMENTO, Calif. - On Thursday Insurance Commissioner Dave Jones released the results of the formal notice he issued last month to all residential property insurers requesting they provide up to 100 percent of contents (personal property) coverage limits for fire survivors who experienced a total loss and relieve them from the requirement of providing a detailed home inventory.

"Many insurers have stepped up to do the right thing for policyholders by agreeing to my request and eliminating more red tape from the claim process," said Insurance Commissioner Dave Jones. "Increasing personal property payments for fire survivors who suffered a total loss is an important step in easing survivors' overwhelming burden and helping them move forward by eliminating or reducing the arduous burden of trying to create a detailed home inventory for every piece of personal property they owned and lost to the fire."

The insurers that agreed to Jones' request have 97 percent of the total-loss insurance claims for policyholders who experienced a residential loss. These insurers have agreed to increase their contents (personal property) payments beyond the 25 percent they already agreed to in response to Commissioner Jones' prior notice, which asked insurers to expedite claims payments.

In response to Commissioner Jones' latest formal request insurers have agreed to make payments, without an inventory, ranging from 50 percent up to 100 percent of contents coverage limits, with many insurers agreeing to at least 75 percent or even 100 percent.

The amount of contents coverage varies among insurers, as the law does not require uniformity of contents coverage. This means even if the insurer provides a higher percentage of payout without an inventory, the amount paid to the policyholder may actually be lower than the payout from an insurer with a lower threshold for payout without an inventory, due to the insurer's lower contents limits.

Conversely, a policyholder whose insurer provides a lower percentage of payout may receive a higher claim payment due to the insurer's higher contents limits. For this reason, it is difficult to compare one insurer's threshold for waiver to another insurer's threshold for waiver.

The department has requested each insurer immediately notify their insureds of the new amounts they will provide, without inventory, and the terms and exceptions. Several insurers have already done this or are in the process of sending these notifications.

The department advises wildfire survivors, if they have not been notified by their insurer or if they have further questions, to contact the department. Wildfire survivors should contact their insurance company to determine the specifics of its waiver of the inventory in relation to the policyholder.

Commissioner Jones continues to urge all insurers to waive the inventory requirement. While Jones requested all carriers accommodate their insureds and his request by paying up to 100 percent of personal property limits without requiring a complete inventory list, the Legislature has not passed a law requiring insurers to waive the inventory or giving the insurance commissioner the authority to order a waiver.

Notes:

• The insurers with total loss claims that have so far agreed to waive the inventory for a percentage of contents coverage based upon the Commissioner request are: State Farm Group, Farmers Group (including Foremost), CSAA, Liberty Mutual/Safeco, Allied/Nationwide, USAA, Travelers, Allstate (including Encompass), Hartford, California Capital, Homesite, Chubb, Auto Club of Southern California, American Modern, Aegis Security, National General, Mercury, AIG, Ameriprise, QBE, FAIR Plan, TOPA, Universal North American Ins, First American Title, Western Mutual, Wawanesa, Stillwater Insurance, Horace Mann, Amica, MAPFRE, and Kemper. 
  
  

• While each insurer agreed to advance at least a certain percentage, there may be exceptions to this commitment. For example, if the home was not furnished, or if other facts exist that suggest the contents were not valued at that agreed to percentage, then the insurer would handle those claims on a case-by-case basis. Policyholders should contact their insurer to confirm how much advance payment will be issued and if there are any exceptions that may exist for their claim. 

• Full list of insurers' responses to Commissioner Jones' request. 
  
  

• Consumers should contact the department at 800-927-4357 or visit us online at www.insurance.ca.gov, if they experience any issues with the handling of their claim.

Source: CPRB