Garamendi Still Hot Over Insurers' Wildfire Response
By Michael Ha
NU Online News Service, June 22, 11:32 a.m. EDT?California Insurance Commissioner John Garamendi has requested meetings with five major homeowners carriers to address complaints they underinsured homes destroyed by wildfires and that replacement cost payments were insufficient, a spokesman said yesterday.[@@]
Mr. Garamendi also announced a news conference for today to push for passage of a "Homeowners Bill of Rights?Southern California Wildfire Survivors Protection Act."
His actions follows last October's devastating blazes that destroyed more than 3,600 homes in the state.
A California Department of Insurance spokesman, Byron Tucker, said Mr. Garamendi had asked to meet with State Farm Insurance Companies, The Allstate Corporation, Farmers, Travelers Property Casualty (now part of The St. Paul Travelers Companies Inc.) and Century-National Insurance Company.
Mr. Tucker said all five companies have agreed to schedule sessions with the commissioner.
According to Mr. Tucker, these companies?five of the biggest homeowners' insurers in California?have attracted most complaints from policyholders whose homes were destroyed during last year's wildfires. "And in addition to these companies, more could be added to the list," Mr. Tucker told National Underwriter.
These complaints, according to Mr. Tucker, involved various allegations by wildfires victims, including charges that insurers' payout on their "replacement cost" policies was too low to rebuild their houses after the fire.
"The bottom line is that after touring San Diego and speaking with hundreds of residents regarding how their claims are being handled, the commissioner decided to develop a ?Strike Force' to investigate the claims process and make sure that people are treated fairly," Mr. Tucker said.
He said the main concern that has arisen is underinsurance, related to payouts that are insufficient to cover rebuilding costs, he said.
Mr. Tucker said that Commissioner Garamendi has been receiving a significant volume of complaints from the wildfires victims. The commissioner had asked for written complaints from victims, and so far his department has received approximately 450, according to Mr. Tucker. Among them, some 150 concerned the underinsurance issue.
The bill Mr. Garamendi is pushing, SB 1474, would prohibit insurance companies from unfairly refusing to issue or renew policies in cases related to fires and natural disasters. The measure is expected to come up for a vote tomorrow before the Assembly Insurance Committee.
Mr. Garamendi said his press conference today at a Sacramento Fire Department station would feature a consumer representative and fire survivors who would "tell of their ordeal to settle claims."
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