Close to Home: Some added insurance for future fire victims

Like many of our neighbors, my wife and I had a very sobering moment when we compared our insurance coverage to the actual cost of replacing our home.

It was, as you might have guessed, woefully inadequate.

I've heard from many families in our area that they found themselves in the same situation. Clearly, something has to change. So I have introduced a package of bills to address issues that all too often lead to underinsurance.

The last thing people need is a surprise in their insurance policy when they are trying to recover from a fire and rebuild their lives and their communities.

Some survivors wanted to rebuild elsewhere or buy a home at a different location. However, many insurers withhold the extended replacement cost coverage unless the owner rebuilds on the same lot. Assembly Bill 1800 would clarify that the coverage limits, including the amounts for extended replacement cost and building code upgrades, are available to those who rebuild or purchase an already built home at a new location.

We've learned that underinsurance can also be caused by inaccurate or outdated replacement cost models used by insurers. Insurers currently don't have to conduct replacement-cost updates on a regular basis to keep up with rising costs. AB 1797 would fix that problem.

It would create a requirement that insurers writing residential property insurance must conduct a replacement-cost estimate when they write a new policy and during the annual renewal process. This would ensure that policyholders are covered with current and timely amounts that accurately reflect the value of their property.

Another issue residents have faced is inconsistency in information provided to them about their policies after a loss. After a total loss, insurers provides policyholders with a copy of their insurance policy. However, current law is too vague on the subject. AB 1799 would require insurers to provide the policyholder with all the information they need to understand the coverage they paid for. This would include the full insurance policy, any endorsements to the policy and the policy declarations page.

These are simple, commonsense policies that would protect future wildfire victims. This legislation proactively addresses issues that lead to underinsurance, and it would ease the already arduous and painful process of rebuilding.

As weather patterns shift, experts tell us to expect bigger and more damaging storms, and longer and riskier wildfire seasons.

The 2017 California wildfire season was the most destructive and costly on record. Cal Fire estimates that 9,054 fires burned 1.3 million acres. A staggering 10,780 structures were destroyed by fires in 2017, and more than 15,000 residential properties were listed as partial losses. Statewide, 43 lives were lost in the fires, more than during the previous 10 years combined.

The Tubbs fire alone claimed 22 lives and destroyed 5,643 structures. These staggering numbers amount to more than half of the 10,780 structures lost to wildfires in 2017 statewide.

The 2017 fires in the North Bay have generated $9 billion insurance claims so far, more than any single fire in U.S. history. There were approximately 2,300 business property claims, 5,000 vehicle claims and 650 claims for other property.

Statewide, consumers claimed an additional $400 million in wildfire-related loses in October, including 376 residential property claims that totaled more than $71 million. In total, the state Department of Insurance estimates the 2017 wildfires caused almost $12 billion in damage.

We hope there will never be another season like it. Unfortunately, hope alone won't change the troubling trend of riskier wildfire seasons. What we can change, however, is the experience of those who have to rebuild after these fires. We can change the law, empower consumers and protect our neighbors so that future wildfire victims don't endure additional hardship in the recovery process.

Marc Levine, D-San Rafael, represents Marin and southern Sonoma County in the state Assembly.