Majority of October Fire Insurance Claims Resolved

April 19, 2004

A new insurer survey estimates that 84 percent of claims stemming from the devastating October wildfires have been settled.
A poll by the Insurance Information Network of California of companies representing more than 66 percent of the homeowner insurance market found that they have paid and completed 10,811 of their 12,902 residential fire claims. To date, those claims have resulted in $751,697,999 worth of claims settlements already paid. Surveyed companies expect those claims to ultimately total $1.26 billion.

While the process of assessing contractors’ bids, acquiring building permits and actual rebuilding can sometimes take a year or longer, the survey found that 454 of the 1,935 “total loss” claims — or close to 24 percent — had already been settled.

More than 19,100 insurance homeowners, auto and commercial insurance claims were filed following the fires, according to the Insurance Services Office. The organization, which compiles and analyzes insurance statistics, projects that insured losses from the firestorms will ultimately total $2.04 billion.

“Fire survivors, insurers and contractors are moving with unprecedented speed to recover from this catastrophe,” said IINC Executive Director Candysse Miller.

The survey tallied brushfire-related homeowners insurance claims paid through April 12, 2004.

In January, another IINC poll found that surveyed companies had completed 860 of 928 brushfire-related auto insurance claims resulting from the fires for a total of $5.01 million. Auto insurance claims were not surveyed in the most recent poll.

With more than 3,500 homes lost to the firestorms, the majority of settled insurance claims are for so-called “partial losses,” or household damage caused by smoke or even firefighting materials. Those who lost their homes may still face a long road to recovery as they work with architects, contractors, planning departments and insurance representatives. Some neighborhoods have already taken extraordinary steps to work together to reduce rebuilding costs and speed the recovery process, resulting in some San Bernardino and San Diego County fire victims already moving into new homes.

Those fire victims still working toward recovery should maintain a calendar of benchmark dates for decisions on rebuilding and completing insurance claims.

Over the next several months, they may face deadlines for replacing possessions lost in the fire, and should keep in mind completion dates for additional living expenses set out in their policy contracts as they schedule their rebuilding effort.

“Most fire survivors have already begun the process of rebuilding their lives by replacing lost possessions and planning their rebuilding process, however, they should consult with their insurance agent to confirm any upcoming deadlines for property replacement or additional living expense coverage,” Miller said.

Homeowner insurance policy contracts typically outline how much time policyholders have to replace damaged or destroyed property. If policyholders have replacement cost insurance, they may receive advance payments for the depreciated value for furniture, televisions, clothing and other household items. Once receipts have been provided to an insurer proving the items’ replacement, the policyholder may receive additional funds to cover the expense.

Insured fire survivors who have additional living expense coverage paying for temporary housing should also check their contracts and consult with their agents to confirm how long this coverage is available to them. This will also help them better plan a timeline for their rebuilding process.

The Insurance Information Network of California is a non-profit, non-lobbying trade association supported by the property and casualty insurance industry.

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