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Tahoe Fire losses could reach $150 million, victims may be underinsured

Insured loss estimates for the Angora Fire that burned south Lake Tahoe have been upped to $100 million to $150 million, according to Risk Management Solutions, a Newark, Calif.-based risk modeling company. Candysse Miller, executive director of the Insurance Information Network of California said at least 415 claims have been filed for home, renter and auto losses.

However, the California Department of Insurance predicted many homeowners could be underinsured to rebuild. CDI also is cautioning against working with fraudulent contractors who may be uninsured or unlicensed.

The wildfire, located in El Dorado County, Calif., consumed approximately 3,100 acres and more than 300 structures by the time it was put out on June 29. More than 3,000 people were evacuated from the area while firefighters managed the blaze.

“The Angora fire is the largest to have occurred in the Tahoe region in over four decades,” commented Don Windeler, RMS director of wildfire risk modeling.

Meanwhile, CDI is trying to determine whether being underinsured will be a problem for victims. “There is a serious problem with underinsurance in the state of California,” Insurance Commissioner Steve Poizner said.

Many homeowners who thought they were fully insured found their policies left them tens of thousands — sometimes hundreds of thousands — of dollars short of what they needed to rebuild following fires that destroyed more than 3,600 homes in Southern California in 2003, Poizner explained.

Dozens of homeowners told state officials after those blazes that insurers wrote their policies based on their estimate of a home’s replacement cost. In many cases, those estimates turned out to be grossly inadequate.

Poizner urged homeowners to meet with their insurance agents to determine if they have enough coverage.

Those who have adequate funds to pay for repairs are being warned that they should verify potential contractors are properly licensed and insured. On July 5, CDI announced five contractors had been arrested for operating illegally.

The California Department of Insurance’s Enforcement Branch set up a sting operation to identify unlicensed public adjusters as well as unlicensed and uninsured contractors.

In the meantime, RMS and IINC said they will continue to monitor the fallout from the fire and will update loss and claims estimates as appropriate.

The Associated Press contributed to this article.