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Los Angeles Times
23-05-2025
- Business
- Los Angeles Times
How to Make Sure You're Properly Insured Before the Next Wildfire
Recent wildfires have reshaped California's insurance landscape, and some Los Angeles homeowners are seeing their premiums skyrocket or are facing policy non-renewals. Wildfire survivors have also gotten smaller insurance payouts than expected, and other Los Angeles County residents who were spared from the fires may not realize they're underinsured. But there are proactive steps you can take now to make sure you're protected in the next blaze. Use this guide to learn how to prepare the proper documentation, choose the right amount of coverage, and know your rights. Standard homeowners' policies usually cover wildfire damage, but in high-risk zones, coverage may be reduced, excluded, or even canceled. 'Your insurance company is not on your side or your good neighbor. They're a for-profit business,' Amy Bach, Executive Director of United Policyholders, warned homeowners. Review these key components of your policy: If your insurer has dropped your policy or won't renew, compare policies through a broker, shop regional carriers, or seek help through the FAIR Plan. Many major insurers, including State Farm and Allstate, have limited or paused new policies in wildfire-prone regions, but you're not out of options. Alternatives include: Ask brokers about bundling options and ensure you're comparing policies based on replacement cost coverage, not just price. Know Your Rights Wildfire survivors in California are protected by a growing set of regulations and state laws enforced by the California Department of Insurance. If you believe your insurer has acted unfairly, file an online complaint with the California Department of Insurance or call 1-800-927-4357. 'They owe to replace what you had with like kind and quality up to your policy limits,' Bach said. 'Stick for stick, board for boards, the exact same house that you had.' California law requires insurance companies to offer discounts to homeowners who make their homes more fire-resistant. These discounts can range from 5% to 20%, depending on the insurer and the upgrades you make. Don't wait for disaster to strike. Take these documentation steps today so that the evidence can speed up your claim and reduce disputes over what was lost. 'The insurance company is not always going to take your word for things,' Bach said. Documentation can 'make or break your case.' Annual check-ins with your insurance agent allow your coverage to keep pace with your home's value and fire risk. Bach also recommends checking your dwelling coverage with some simple math to be sure it's realistic for California's current costs. 'If you know how many square feet of living space is in your home, and you know what your current dwelling limit is on the house,' Bach said, 'you want to divide that dwelling limit by the amount of square footage and see how much money you would have available to you to pay a contractor.' Bach said the amount can vary based on your home, but it should be somewhere between $300 and $400 a square foot at a minimum. Other experts estimate that rebuilding after the wildfires can average $600 per square foot, factoring in tariffs, labor shortages and increased demand. Custom homes or properties built with high-end, fire-resistant materials can reach over $1,000 per square foot. If you're not sure where to start, visit United Policyholders for more wildfire recovery and insurance resources. You can also try the insurance finder tool from the California Department of Insurance or read more insurance tips from CAL Fire.
Los Angeles Times
14-05-2025
- Business
- Los Angeles Times
What to Do if You're Underinsured After a Wildfire
After a wildfire, some homeowners experience a second shock when they open their policy and discover their insurance won't cover the full cost to rebuild. If your policy limit is too low to restore your home, you're considered underinsured, and it's a problem that affects many Californians, even those who thought they were fully protected. Amy Bach, Executive Director of United Policyholders, a nonprofit that helps disaster survivors navigate insurance claims, said underinsurance is one of the most common and complex challenges after a wildfire. But there are ways to identify your options, close the gap, and, in some cases, push back on your insurer. The first thing to do is figure out how your coverage amount was set, and whether the underinsurance is the result of something you did, or the result of bad advice or miscommunication from your agent or insurer 'We encourage people to look through their emails and see what kind of communications they had with their agents and their insurance company,' Bach said. 'Did you ask for full coverage and get that assurance in writing?' If you can find emails or records showing that your agent told you the coverage would be enough, and it wasn't, you may have a case to challenge the policy limits 'That's the make-or-break for an underinsurance case,' Bach said. 'If you have any evidence that the insurance company gave you that assurance, that can be the difference between getting your limits retroactively increased and just being stuck.' Underinsurance often occurs when a homeowner hasn't adjusted their policy to keep up with rising construction costs or changes to their home. A policy might have been adequate years ago, but inflation, new building codes, and post-disaster price surges can leave coverage tens or even hundreds of thousands of dollars short. To avoid this, experts recommend: In some cases, homeowners may have chosen not to add these features without fully understanding the risks, or weren't clearly advised about their options. 'The law in California is that the insurance company only has a duty to get you insurance. It doesn't have to be customized or adequate unless they voluntarily undertook a duty to make the coverage fit what you needed,' Bach said. Even if your limits can't be increased, there are strategies to help you close the coverage gap. Use Other Parts of Your Policy Some survivors use unspent personal property coverage to help pay for rebuilding, especially if they're not replacing everything they owned. In some cases, careful use of Additional Living Expenses (ALE) coverage can also help bridge short-term financial needs. Scale Back the Rebuild Bach said some homeowners choose to adjust their relocation or rebuilding plans based on how far their insurance money can go. 'Some people fill their gap by using their contents money,' Bach said. 'Some people fill their gap by building a smaller home.' Consider a Group Rebuild In fire-damaged communities, some homeowners work together to lower costs by organizing group rebuilds. 'They get together with a bunch of neighbors. They hire one builder. The builder gives them five choices of plans,' Bach said. 'It's sort of a semi-custom situation, and it makes it financially viable.' Apply for a Loan Homeowners may choose to borrow money to rebuild through a loan or a home equity line of credit (HELOC). Bach said the best approach for most people is the Small Business Administration (SBA) disaster loan because of their very low interest rates. Affected homeowners can secure an SBA loan to supplement their insurance payment, even if they don't own a business. If you believe you were misled or that your insurer acted in bad faith, it may be time to seek legal help. 'Very often, people who are underinsured end up having to hire a lawyer if they really want to push back,' Bach said. 'It's very hard to do it on your own.' United Policyholders has more information and self-help materials on its website to guide underinsured wildfire survivors through the recovery process.'
Los Angeles Times
09-05-2025
- Business
- Los Angeles Times
Think Your Homeowners Insurance Payout Is Too Low? Here's How to Push Back
Many wildfire survivors in Los Angeles are running into the same frustrating pattern after filing their insurance claims. The payout falls short of what they need to rebuild, or the check might only cover part of the damage based on a computer-generated estimate that doesn't match reality. If you believe your insurer has underpaid you, there are steps you can take to challenge the amount and demand a fairer settlement. Amy Bach, executive director of United Policyholders, a nonprofit that advocates for insurance consumers, shared guidance on how to push back. 'If your insurance company has offered you less than what you believe you're entitled to ... start by getting an independent estimate of your loss,' Bach said. This could come from a local contractor or builder. If the underpayment relates to your home's structure, hire someone with experience in post-disaster assessments. If it's about your personal belongings, prepare a detailed contents inventory. Bach also recommends pairing your estimate with a scope of loss, which documents the quantities and qualities of materials that were in your home, without including prices. It provides more detailed information, such as the square footage of carpeting, the type of countertops, molding details, and whether any features were custom. 'We really encourage people to take the time … so that they can compare apples to apples with the insurance company's estimate,' Bach said. It may cost money to do, Bach added, but it's especially important for people who want to buy a new home instead of rebuilding. When generating payouts, insurers often rely on software like Xactimate to estimate costs, Bach said. 'The default settings are for tract homes and flat areas. The pricing is not going to be realistic for California very often,' because of the custom homes and higher building costs, Bach explained. Insurers may also use contractors who, according to Bach, 'are friendly to them, who are going to say what they want.' They are typically 'on the low side of their quotes,' she added. When it comes down to it, 'having a real-life local builder give you an estimate to put your house back the way it was, before the loss, is going to get you a lot farther than anything else,' Bach said. Once you have your own documentation, send it to your insurer with a clear and professional letter about your claim. 'Present your position … and reference the laws that insurance companies are obligated to follow,' Bach said. This letter should include your independent estimates, photos, receipts, and any other supporting documentation. Clearly state the amount you're requesting, why you believe it's justified, and that you expect the company to comply with California insurance regulations. 'You have to be businesslike about it — this is a negotiation,' Bach said. If your insurer still won't budge, there are other steps to take to increase the payout, like filing a complaint with the Department of Insurance. California's Department of Insurance accepts consumer complaints online and may contact the insurer to help get to a resolution. This step creates a formal paper trail, which can be helpful if the dispute continues. 'People go off track in their negotiations with their insurance company, because the insurance company thinks they're trying to profit from their loss,' Bach said. 'That's why we really emphasize proving your case through independent documentation from third parties.' If the matter remains unresolved, Bach said it may be time to bring in outside help like a public adjuster or a lawyer. Public adjusters typically charge a percentage of your settlement, which is paid after it is secured. Under California law, public adjusters cannot take more than 10% of the total insurance recovery claims related to a declared disaster, like the Palisades and Eaton wildfires. Bach recommends using California-based adjusters, checking their references, and ensuring they're members of reputable trade associations, such as the Pacific Coast Association of Public Insurance Adjusters (PCAPIA) or National Association of Public Insurance Adjusters (NAPIA). Bach said it's the best way to ensure they know California law and can help you recover everything you're owed to rebuild 'stick for stick, board for board, the exact same house that you had.' Being an advocate for yourself, staying organized, pacing yourself, and comparing notes with neighbors insured by the same company can make all the difference when disputing a payout, Bach said. 'Your insurance company is not on your side or your good neighbor. They're a for-profit business,' Bach said.
San Francisco Chronicle
03-05-2025
- Business
- San Francisco Chronicle
Insurance ‘re-underwriting' is on the rise in California. Here's how I fought State Farm and won
State Farm, my home insurer for the past 25 years, recently wrote to enumerate several 'positive measures that should be taken to reduce the risk for loss.' That sounded positive enough — until I read that if my husband and I didn't comply, including installing a new roof (at an average local cost of $16,051), the company would 'non-renew' us. Such threats, known as 're-underwriting,' have panicked many Californians because State Farm and other large insurance firms have abruptly cited reasons to cancel clients who must then scramble for scarce and often costlier policies. Our State Farm letter said our roof must be replaced 'as evidenced by the granular loss and worn shingles.' We were also directed to trim landscaping around the house and trim some overhanging tree limbs. We figured we could do the landscaping ourselves and hire a tree-trimmer for less than $700. The roof was another matter. We had already replaced nearly all of it during the past 10 years. Sara Lopez, president of our contractor, McLeran Roofing in San Rafael, assured us it was in good condition and made with fire-resistant, Class-A composition shingles. What's more, our home in San Anselmo is not in a high-risk zone for fires, according to Cal Fire maps. So why was State Farm telling us to spend $16,000 that we didn't have? I called our longtime insurance agent, expecting support. After all, 'like a good neighbor,' he sends us holiday cards every year. While waiting to hear back, like any good Boomer, I took my complaints to Facebook and Nextdoor, where I received lots of comments like: 'We are in the same boat. Redoing our roof next month.' Of course, I support fire safety and doing anything I can to protect the life savings embedded in our home. Yet anecdotal and press reports warned me we could do everything State Farm demanded and still lose coverage. Amy Bach, executive director of United Policyholders, a consumer advocacy group in San Francisco, suggested a reason for the increasing trend. 'It's not only that climate change is increasing natural-disaster risk; it's also that insurers are buying aerial imaging and risk-scoring tools that are making it too easy to put existing customers in the discard file,' she said. 'They're taking away the human look at a property and replacing it with a number.' Bach and other experts say they believe that increasingly risk-adverse insurance companies are targeting older homes like ours (built in 1948) because, on average, they'll have more — and riskier — old-fashioned plumbing and wiring. Our agent promised to fight for us but said he couldn't guarantee that, even if we did everything they asked, we would be reinsured. (Such a promise would give us grounds to claim a breach of contract.) Instead, he asked for copies of our roof-repair invoices and evidence of our roof's condition. We paid $350 for an inspection that echoed Lopez's assessment. Our agent then told us he had aerial photos of moss growing on it. 'You need to remove that moss,' he said. 'You don't need to remove that moss,' retorted Lopez, who said it wasn't harmful, whereas power-washing to remove it could actually damage our shingles. Our agent countered that the Bad Cop underwriters wouldn't appreciate us challenging their diktat. So, we paid a guy $500 to power wash the roof, even as I worried it would all be for naught. In January, the same month we got that State Farm letter, a San Diego law firm filed a homeowners' class-action suit against Liberty Mutual, claiming the firm canceled policies after flawed drone inspections falsely reported issues such as algae, mildew or mold. 'People would challenge the reports and Liberty would send an 'engineering report' with aerial photos,' said plaintiffs' attorney Michelle Meyers. 'Then people would get their roofs power-washed and Liberty would still maintain the non-renewal.' What should we do? I asked Meyers. 'You have to challenge the non-renewal and at the same time, unfortunately, keep looking for new insurance,' she said. '(((You don't want to get dropped because all the insurance companies talk to each other…))))You need to show you've taken steps either to comply or show them the evidence that it's not needed.' ((((Joel Gumbiner, a San Rafael attorney who helps clients fight insurance firms for coverage, confirmed that insurance companies are legally free to non-renew for almost any reason. They just have to give you 75 days notice and it has to be when your policy is due for renewal.)))) 'The bottom line is we don't have a law on the books to force companies to insure someone they don't want to,' Bach said. Her organization has recently lobbied for legislation to require insurers to notify policyholders of problems, give them time to fix them, and then, if the problems are fixed, renew. In the meantime, Bach advises policyholders to 'be tenacious. Send pictures and documents from third-party experts.' She said at least two insurance firms, Mercury and CSAA, have accepted certificates of fire safety from the Insurance Institute for Home and Business Safety as a basis to renew policies. If all else fails, Bach says, ask for assistance from the California Department of Insurance, which occasionally works. Still, with Meyers' dark scenario in mind, I started checking out our options, should State Farm finally drop us. They weren't great. State Farm, which stopped writing new policies in California in 2023, isn't the only big insurer trying to wind down. Two Farmers Insurance Group subsidiaries and Amguard are quitting altogether. A broker recommended we turn to the FAIR plan, California's fire-risk insurer of last resort, and supplement that limited and pricey plan with one from a small, unaccredited firm called Bamboo. Both providers get terrible reviews. Meanwhile, I heard from friends who said they were now paying as much as $10,000 annually for insurance. A couple of weeks ago, however, after three months of stress, our agent emailed that our efforts had sufficed — at least for another year or two. In the meantime, State Farm (which paid its CEO a record $24.4 million in 2022) seemed closer to getting an 'emergency' 17% rate hike. I suppose it's all part of our dreadful new normal. The escalating fire risks from our world's increasing negligence about climate change are playing havoc with all our old assumptions, including the one where insurance firms, 'like a good neighbor,' competed for customers rather than scheming to drop them. While I'm grateful to our agent for helping us hang on, I fear that from now on, his holiday cards will simply remind me how the vestiges of courtesy that once held us together are going up in flames.
Yahoo
04-04-2025
- Climate
- Yahoo
Tornadoes will become more frequent in coming weeks. Here's what to know if your home is destroyed
An average of 1,200 tornadoes hit the United States yearly, and the country will probably get more killer supercells spawning tornadoes and hail as the world warms, according to a 2023 study. That study also warns the severe storms are edging eastward to strike more frequently in populous Southern states including Alabama, Mississippi and Tennessee. But tornadoes can happen at any time of year and have been reported in all 50 states, according to the National Severe Storms Laboratory. What should you do after a tornado if your home is damaged or destroyed? Focus on your safety The word people most commonly use to describe their mindset after a natural disaster is 'overwhelmed,' according to United Policyholders, a nonprofit that advocates for insurance consumers. 'Our basic guidance is to first focus on you and your family's safety,' said Amy Bach, United Policyholders' executive director. Next, if possible, she recommends photographing and documenting damaged and destroyed property — without entering severely damaged buildings — and determining whether further damage can be prevented through the use of tarps, fans or other methods. Finding safe and comfortable temporary shelter and getting a copy of your current insurance policy are important next steps. When you're safe, have shelter, and have an idea of the extent of your home's damage, be sure to notify your insurance company. How's your insurance? Tornado damage is generally covered under homeowner's and renter's insurance policies. But you'll want to read your insurance policy to know your deductible costs and what is covered, Bach said. If damage is minor to moderate, it might not cost as much to repair as the deductible in your policy. 'We tell people not to rush and to instead take stock and get situated before making any decisions,' she said. 'Know that you'll get solicited (by contractors), and in the first 48 hours, the shock and the trauma generally means you're not in your best decision-making mode.' For temporary, immediate housing, people often turn to a shelter opened by a local government, the American Red Cross or other organizations. In addition to providing a place to sleep, water and meals, Red Cross services — all of which are free — can sometimes also include child care, information about disaster-related resources in the community, and access to case workers to help with disaster recovery. People also may need to access insurance to cover longer-term housing, to rebuild a home and/or replace belongings, including vehicles. If you are not able to live in your home, keep receipts for hotel bills, clothing and meals, and take notes on the calls you make to insurance companies, including the numbers you call, the people spoken to, dates and times, and what was said. Keep up payments If your residence is temporarily uninhabitable or destroyed, the Red Cross recommends notifying utility companies and other services so they can stop billing you immediately. Paying insurance premiums and rent or mortgage should be your highest priority, according to the Red Cross. Call any creditors and ask for more time to pay. Most creditors will be willing to work with you, especially if you notify them before a payment is due, the Red Cross said. Overall, most people have a very steep learning curve after a tornado or other natural disaster because people think they'll be OK if they have insurance. The Red Cross also has a section on its website dedicated to recovering emotionally after a disaster. ___ Baumann reported from Bellingham, Washington, and Thiessen from Anchorage, Alaska.
