Personal Property Coverage for Nor-Cal Fire Claims: Update

In December, California State Insurance Commissioner Dave Jones put pressure on insurance companies, urging them to provide fire victims up to 100 percent of their personal property coverage limits without requiring them to fill out a detailed inventory.

Insurance companies generally require policyholders to submit a detailed inventory of every item they lost when they file a contents claim. In addition to providing this exhaustive list, they generally require policyholders with replacement cost coverage to personally replace each item and provide a receipt if they want to collect reimbursement of its full replacement cost. This process can be long and arduous, especially when homeowners are dealing with so many changes to their daily lives due to the fire.

While some insurers are paying up to 100 percent of policy claims up to each policyholder’s limit for personal property without a fully itemized list, many insurers are still falling short behind.  

The Department has stated that companies representing 97 percent of the total-loss residential claims have agreed to pay more than 25 percent of the contents limit without a detailed inventory. Thirty-four companies agreed to pay at least 50 percent of contents without an itemized list. These companies include State Farm, Farmers/Foremost, CSAA Insurance, Nationwide/Allied, USAA, Allstate, Liberty Mutual/Safeco and Travelers.

The Department also sated that 10 insurance companies have agreed to pay less than 50 percent or didn’t change their claims-handling policies at all.

Under a bill introduced in the state Legislature, SB97, insurers would have to offer policyholders, after a declared state of emergency, an amount equal to at least 80% of their contents coverage without their contents coverage without requiring them to submit a detailed inventory. This bill would apply to claims filed by July 1,2017, or later by homeowners and renters.

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