California Commissioner Asks Insurers to Cover Wildfire Losses Sans Home Inventory

California Insurance Commissioner Ricardo Lara is asking insurers to help wildfire survivors by providing up to 100% of personal property coverage limits without a detailed inventory to those who suffered a total loss of their home.

“Wildfire survivors who are still sifting through the ruins of their home should not have to face an exhaustive inventory in order to start the recovery process,” Lara said. “That is why I am asking insurance companies to do their part for their policyholders by providing coverage without the burdensome requirement of a detailed home inventory in order to have their claims paid.”

The recent California wildfires have destroyed neighborhoods and devastated communities. The California Department of Insurance reported receiving numerous complaints from policyholders about the task of identifying every item of personal property they may have lost in the recent wildfires to collect the replacement cost of such items.

Gov. Gavin Newsom in early October signed Senate Bill 872 and Assembly Bill 3012, designed to provide protections for policyholders who suffered a covered total loss resulting from a wildfire during a state of emergency. Even though the new laws are not yet in effect, Lara is asking that residential insurers to offer a payment under the contents coverage of no less than 30% of the policy limit applicable to the covered dwelling structure, up to a maximum of $250,000, consistent with requirements in chaptered AB 3012.

Many insurance companies have already agreed to the Voluntary Expedited Claims Handling Procedures requested by Lara’s Aug. 26 notice, which included an advance payment for personal property of at least 25% of contents coverage without an inventory.

For major wildfires in the past handful of years, a large number of insurers made efforts to accommodate their policyholders by offering up to 100% of contents limits without an inventory, while giving policyholders the ability to recover additional benefits if they subsequently complete a full inventory.

Lara is asking all insurers to notify the department by Oct. 23, whether they will comply with the notice and what percentage of total contents coverage they will provide without requiring a detailed personal property inventory.