Calif. Fires Could Exceed Last Year's Losses

The CDF went on fire season status May 3, three weeks earlier than last year. Fires in 2003 destroyed more than 500,000 acres, damaging more than 5,200 structures, including 3,600 homes. The fires were blamed for 22 deaths.

Pete Moraga, a spokesman for the Network based in Los Angeles, said last year's fires cost more than $2.04 billion in insured losses on 19,100 claims filed with insurers.

So far this year, he said, fires have damaged 14 homes and 20 other structures. The worst fire so far this year was in Riverside County, near the border of San Diego, where some of the biggest blazes occurred last year.

"It points to a season that could be the worst seen in a long time," he said. "Everybody is bracing for it," said Mr. Moraga.

The region is in its fifth year of drought, and only a change in temperature and humidity saved the region from incurring a more extensive blaze.

"It has gotten hotter a lot earlier," he added. "Last week and the week before, we had some 100 degree weather. That's pretty hot for this time of the year. The types of situations that exasperate the fire season, that we usually see in August and September, are things that we are seeing right now," said Mr. Moraga.

Besides the drought, the state is fighting a bark beetle infestation that is killing acres of trees. There are no funds available to remove the trees, adding fuel to the potential wildfires, especially in the San Bernardino Mountains just east of Los Angeles, noted Mr. Moraga.

Insurers, he said, are preparing by paying strict attention to underwriting and making inspections to property to ensure policyholders are doing what they need to do to minimize fire damage to their homes.

Derek Ross, vice president of C.M. Meiers, an insurance brokerage firm based in Woodland Hills, Calif., said while he has not received any specific instructions from companies, he is reviewing policy limits and reassessing policies to make sure the coverage amounts are accurate in light of increased costs for rebuilding a home.

"What we are finding is that the majority of our policyholders are underinsured," he said. "While I have not heard anything specifically from our insurers, I'm guessing that they are happy because we are collecting the appropriate premium that would offset any additional cost to them for any future catastrophes."

He said the firm is inspecting up to 80 percent of the new business written homes depending upon the carrier and the location of the home. The inspections also cover other risks such as earthquake and flooding, he added.

Last week California Insurance Commissioner John Garamendi issued an announcement urging residents to review their policies in view of the new fire season. He warned that there are dire issues surrounding underinsured homes.

Mr. Garamendi has been urging the legislature to pass a package of bills that he calls a "Homeowners Bill of Rights" regarding insurance.

According to Mr. Garamendi, major insurers failed to properly handle many claims from last year's fire victims.