Sonoma County family displaced by fire struggles with State Farm policy on lost belongings

For Lauren and John Thompson, catastrophe barged in last year as it did for thousands of others that night: with the smell of smoke. The thick scent roused the Wikiup homeowners from their sleep, and they ran out to the street to investigate. All seemed normal, except for the strong wind and the sharp tang of burning wood that it carried.

“So we went back inside and went on Facebook, and all the messages we were seeing were pretty frightening,” said Lauren Thompson. “We went outside again, and this time we could see this deep orange glow from the direction of Petrified Forest Road. It was incredibly ominous.”

While they stood transfixed, a car sped up the street. The driver yelled that a fire was coming over the hill, and that everyone had to evacuate. The Thompsons needed no further prompting. They packed a bag with essentials, roused their two kids, jumped in their own vehicle, and left. By then all the streets in and out of the Wikiup area were clogged, and some buildings at Cardinal Newman High School were aflame.

“There was so much traffic that it took an hour and a half to get from our house to Highway 101,” Lauren Thomson said. “But even though we knew it was a serious wildfire, we didn’t think we’d lose our home, let alone our entire neighborhood. We just thought there was no way everything could burn.”

The next day, the Thompsons learned that it was all gone: their home, all the houses on their street, the entire neighborhood.

“In one sense, we were lucky,” said Lauren Thomson, a marketing director for a real estate firm. “We were able to find a rental home in Windsor just a couple of exits north on the freeway from Wikiup. But for the first couple of weeks, I found myself getting incredibly frustrated, angry, even. This wasn’t my home. This wasn’t my store where I shop for groceries. We felt disconnected.”

The couple’s kids, however, served to center them, bring them back to a tolerable emotional baseline.

“We had to make sure things felt normal for them, that they were comfortable,” Thompson said. “We had to make sure they got to school on time, and that they were picked up on time. That really helped us keep our priorities straight.”

Also anchoring the couple was their determination to rebuild. They never had any real doubt on that score. They loved the Wikiup area, and they figured they were sufficiently insured.

“I called my insurance agent at State Farm, and basically just said, ‘What do we do?” Lauren Thompson said. “They read us our coverage, and it came to $750,000. Our home had been appraised at $715,000, so we figured we were OK.”

They weren’t. Being in the real estate business, Thompson already knew there was a housing shortage in Santa Rosa, and that labor and materials were at a premium as a consequence. But when she and her husband started penciling out numbers for reconstruction costs, she discovered the situation was worse than she had thought.

“For the house we had - four bedroom, 2,900 square feet - it was going to cost between $850,000 to $900,000 to rebuild,” Thompson said.

The Thompsons felt they could still go ahead, but they’d have to use all or most of the money from their contents coverage - the ancillary policy covering household goods - to do it.

“And even then it could be tight,” said Thompson. “We had $60,000 coverage for cleanup costs, and we went with FEMA to do that job. But we probably won’t get that bill for a couple of years, and it’s not at all clear that $60,000 will cover it, so we’ll have to put that money aside. I lost a week of work during the fires, and my husband is an internal investigator with the state Department of Corrections. We’re working people, we’re not independently wealthy. We have two kids, and the bills keep coming in. We don’t have a lot of options.”

So when State Farm told the Thompsons that the company could only cover 75 percent of the contents policy without an itemized list, she became, as she put it with considerable understatement, “extremely upset.” The burden of meticulously itemizing each and every piece of household property was more than difficult - it was practically impossible, and she strongly suspected State Farm knew that.

“You spend hundreds of hours dealing with the aftermath of a catastrophe like this, and then you’re told you have to do more and more needless work just to get the full amount of money owed to you. It’s too much,” Thompson said. “We were already upset with an initial lowball offer of $630,000 for construction costs, and then delays by adjusters that they attributed to the holidays, so this just put us over the edge. We became even angrier when we talked to fire victims who had been covered by other companies, and they had received the full amount of their contents policies with no questions asked.”

It turns out a lot of other fire victims covered by State Farm felt the same way - at least 144 of them, in fact. The group, including the Thompsons, sent an open letter to State Farm CEO Michael Tipsord and the firm’s board of directors urging immediate and full payouts on property coverage without delay, noting such action “would be relieving to so many of us with one of our many burdens, while creating positive public relations and good will.”

California Insurance Commissioner Dave Jones in January urged insurers to waive the inventory requirement, requesting they provide up to 100 percent of personal property coverage for fire survivors without having to compile the detailed list of lost belongings.

A State Farm representative said that while the company was not waiving “any contract provisions,” policy holders can receive and keep an advance on up to three-quarters of their contents policy without the inventory.

“For those customers seeking additional amounts beyond the 75 percent, State Farm is available to support them in completing the contents inventory process,” said Sevag A. Sarkissian, a company spokesman. “Customers do not have to wait until their entire inventory is completed to submit to their claim. We encourage submitting inventories by rooms to make it easier for our customers to compile. We also recommend grouping items of similar quality/price/age.”

Thompson is feeling somewhat more sanguine these days because she and her husband recently received a check from State Farm for $784,000 for construction costs. But they still need the payment from their contents policy, and it remains unclear how much money they’ll receive, and when they’ll receive it.

“In any contact with them, you just feel this pressure to settle, and at the lowest possible cost,” said Thompson. “It’s unrelenting. We’re negotiating in good faith. We’ve always paid our premiums. People who lost their homes here are suffering PTSD. This just adds more and stress to a situation that has already put us all at the limit.”