Will My Insurer Pay Me 100% of My Contents Claim After a Wildfire Loss?
California’s Insurance Commissioner Thinks They Should Without an Inventory
Experiencing the loss of your home and personal belongings in a wildfire is an unimaginable hardship. The devastation from a California wildfire property damage event can leave individuals struggling to rebuild their lives. The thought of cataloging every item you’ve lost—each piece holding memories and significance—is not only emotionally draining but also a monumental task. In recognition of this, California Insurance Commissioner Ricardo Lara issued a notice last week urging insurance companies to alleviate this burden for urban wildfire victims sustaining property damage.
In his recent notice, Commissioner Lara calls upon all residential property insurers to follow the example of companies that are offering up to 100% of personal property (contents) coverage limits without requiring policyholders to complete a detailed inventory. Typically, those impacted by wildfire property damage would need to audit the hundreds of different items in your home acquired over several years or decades.
Under existing California law, which began in 2022, in the event of a total loss of a primary dwelling due to a state-declared emergency, like the recent California wildfires that caused widespread property damage, insurers are mandated to offer a payment of no less than 30% of the dwelling policy limit for personal property coverage, up to $250,000, without necessitating an itemized claim—no questions asked and no extra forms to fill out or attest to, as State Farm recently attempted to do. Other carriers behaved differently and complied with their own policy terms to offer 75% to 100% of contents coverage limits without an inventory, allowing policyholders to claim additional benefits upon completing a full inventory later. Commissioner Lara commended these insurers and urged all others, including the California FAIR Plan, to adopt similar practices.
It’s important to recognize that while this notice strongly encourages insurers to provide these accommodations, it does not legally obligate them to do so for California property damage. Commissioner Lara requested carriers to respond to this notice in writing by sending an email to the Senior Insurance Compliance Officer by February 28, 2025.
It will be interesting to see how insurers respond to this notice considering the existing, albeit newer, law requiring a significant payment without an inventory. Moreover, this is not the first wildfire causing property damage in California since January 2022 when the laws went into effect. In cases where California policyholders are facing disputes or complications related to their wildfire property damage claims, a California property insurance attorney may be a vital resource.
