LA Fire Victims Demand Action: Are Insurers Delaying and Denying Claims?

LA Fire Victims Demand Action: Are Insurers Delaying and Denying Claims?

The aftermath of a devastating fire is a chaotic and emotional time. Families are displaced, homes are destroyed, and lives are upended. Amidst this turmoil, the last thing victims need is a battle with their insurance companies. Yet, in the wake of the recent Los Angeles wildfires, a concerning trend has emerged: LA Fire Victims Demand Action: Are Insurers Delaying and Denying Claims? Surveys reveal that a staggering 70% of insured survivors are facing claim delays and denials, leaving 8 in 10 still displaced nearly a year after the January fires. This raises a critical question: Are insurance companies failing those they are meant to protect?

The Devastation and the Displaced

The January wildfires in Los Angeles County were particularly brutal, damaging or destroying nearly 13,000 homes. The speed and intensity of the fires left many residents with nothing but the clothes on their backs. As families grappled with the trauma of losing their homes and possessions, they turned to their insurance providers, expecting a swift and supportive response. Instead, many have encountered a frustrating and disheartening process marked by delays, underpayment, and outright denials.

A Cry for Accountability

Frustration is mounting, with fire victims demanding action and accountability from both insurers and state regulators. Recently, victims of the January wildfires in Los Angeles County urged Governor Gavin Newsom to call for the resignation of California Insurance Commissioner Ricardo Lara, accusing him of being too closely aligned with the interests of insurers. They claim that Lara has allowed insurers to delay, deny, and lowball claims, forcing victims to deplete their retirement savings and max out credit cards while fighting for their benefits.

Jill Spivack, a Pacific Palisades resident whose home burned down, voiced the sentiments of many when she stated, “Californians deserve an Insurance Commissioner who protects families, not the insurers doing harm.”

Are Insurers Acting in Bad Faith?

California law requires insurance companies to act in good faith when handling claims. This means they must:

  • Acknowledge claims promptly (within 15 days).
  • Thoroughly investigate claims (generally within 40 days).
  • Approve or deny claims within a reasonable timeframe (40 days after proof of claim).
  • Pay undisputed portions of claims without delay (within 30 days of approval).
  • Cover additional living expenses (ALE) for displaced policyholders.

However, many fire victims allege that insurers are violating these regulations by:

  • Taking excessive time to investigate claims.
  • Offering settlements that are far below the actual value of the losses.
  • Denying valid claims based on questionable interpretations of policy language.
  • Failing to adequately cover additional living expenses, leaving families struggling to find temporary housing and cover basic needs.

Candise Shanbron, managing partner of property damage law firm Cernitz Law, stated that insurers “might just flat-out deny the claim, hoping that nothing will ever come of it, or they deny the claim knowing that they will end up getting sued, but at least the denial and the waiting for the lawsuit to get filed will buy them more time that they need.”

The FAIR Plan and Coverage Concerns

The California FAIR Plan, designed as a fire insurer of last resort for high-risk properties, has also come under scrutiny. Some fire survivors claim they were dropped by their private insurers shortly before the fires, forcing them onto the FAIR Plan with limited coverage. Concerns have been raised that a deal struck in 2023 with insurance companies incentivized them to cancel homeowner’s policies in exchange for future rate hikes. This resulted in the FAIR Plan nearly doubling, leaving many families with inadequate coverage.

What Can Fire Victims Do?

If you are a fire victim struggling with your insurance claim, here are steps you can take:

  1. Document Everything: Keep detailed records of all communication with your insurance company, including dates, names, and the content of conversations. Save all emails, letters, and claim-related documents. Take photos and videos of the damage before any repairs are made. Create a detailed inventory of all lost or damaged items, with receipts if possible.
  2. Know Your Policy: Carefully review your insurance policy to understand your coverage limits, deductibles, and policy exclusions. Pay close attention to deadlines for filing claims and submitting documentation.
  3. File a Formal Complaint: If you believe your insurance company is acting in bad faith, file a formal complaint with the California Department of Insurance (CDI). The CDI can investigate your complaint and take action against insurers that violate state regulations. You can contact the CDI Consumer Hotline at 1-800-927-4357.
  4. Seek Legal Assistance: Consult with an experienced California insurance attorney who specializes in fire damage claims. An attorney can review your policy, assess your claim, negotiate with the insurance company on your behalf, and, if necessary, file a lawsuit to protect your rights.

  5. Utilize Available Resources: Several organizations offer assistance to fire victims, including:

    • United Policyholders: A non-profit organization that provides support and resources for consumers navigating insurance claims.
    • Disaster Legal Services California: Offers free legal help for victims of disasters, including wildfires.
    • The State Bar of California: A resource for finding legal help with issues relating to the California wildfires.
    • FEMA: Apply for FEMA support to cover housing, repairs, and other essential needs.
    • Be Aware of Deadlines: There are critical deadlines for filing insurance claims after a fire. Generally, you have 60 days from the loss to provide initial claim notice, 6 months to submit a detailed inventory, and 12-24 months to file a final proof of loss. Missing these deadlines could jeopardize your claim.

Time is of the Essence

California regulations require insurers to acknowledge claims within 15 days, decide on your claim within 40 days of receiving your completed proof of claim forms and all required supporting documents, and make a final payment within 30 days of approving your claim.

The Road to Recovery

The road to recovery after a fire is long and challenging. Fire victims need and deserve the full support of their insurance companies. By understanding their rights, documenting their losses, and seeking professional assistance when needed, fire victims can fight back against unfair claim practices and rebuild their lives.

If you’re grappling with insurance claim issues following a fire, remember that you’re not alone. Seeking legal counsel can provide clarity, protect your rights, and help you navigate the complexities of the claims process. Contact our firm today for a consultation, and let us help you on your path to recovery.