Op-Ed: Insurers Need to Step Up for LA Wildfire Survivors

Mayor Karen Bass and Kathryn Barger are urging the state to help fire survivors receive the insurance proceeds they’re owed.
Photo: RICH SCHMITT

 (This Op-Ed first appeared in the L.A. Daily News on August 17 and is reprinted with permission from the Mayor’s office.)

By: LA MAYOR KAREN BASS and L.A. COUNTY SUPERVISOR CHAIR KATHRYN BARGER

It’s been seven months since the most destructive wildfires in Los Angeles County’s history tore through our communities. For thousands of survivors, a terrible struggle persists: one against delays, underpayments, and indifference from the core institution meant to help people recover.

The wildfires that erupted on January 7 tragically killed 31 people and damaged or destroyed more than 16,000 structures across our county–from Pacific Palisades to Malibu to Altadena–changing lives and the landscape of Los Angeles forever.

Rebuilding is underway and we’re making progress. In the communities we represent–Pacific Palisades in the City of Los Angeles and Altadena in unincorporated Los Angeles County–debris removal is more than 95% complete. Hundreds of homes are moving through the permitting process. In the City and County, more than 400 permits have been issued, and home construction is underway. But despite this progress, one painful problem remains: the insurance system.

A new report by the Department of Angels reveals that 70% of insured Eaton and Palisades fire survivors are facing delays, denials, or underpayments that are derailing their recovery and preventing them from making basic decisions about their futures.

As local elected officials, we don’t have jurisdiction over the insurance industry. But we do represent constituents–many of whom lost everything–and we cannot remain silent when those we serve are being failed in their time of greatest need.

Unfortunately, what we’re witnessing in Los Angeles County isn’t unique. Across California and the nation, the insurance industry is increasingly under strain, hampering people’s ability to recover from disasters and making it harder to prepare for the next one.

California Insurance Commissioner Ricardo Lara has launched investigations into the claims practices of the California Fair Plan and State Farm. We support this scrutiny and believe stronger oversight and reforms are urgently needed.

As we work to rebuild our communities, there are also serious questions about the health of the private insurance market. According to the Center for American Progress, in the wake of more and more costly disasters, insurers are reducing coverage, exiting high-risk markets, and dramatically raising premiums. For many Americans, the high cost of coverage leaves them unprotected.

Last year alone, there were 27 weather and climate disasters with losses exceeding $1 billion each in the U.S. and costing a combined total of more than $182 billion in damage.

This is why we’re joining the growing call for change. The insurance industry must step up–and state regulators must ensure they do.

In response to the concerns of hundreds of fire survivors, we are calling for a series of reforms that would strengthen consumer protections and accelerate recovery for wildfire survivors.

First, insurers must be required to pay out maximum amounts allowable under all coverage categories in existing insurance contracts for policyholders who are underinsured. This would provide families with the capital they need to rebuild and move forward.

Second, systemic complaints stemming from the Eaton and Palisades Fires against insurance companies must be fully evaluated before any rate increases are considered.

Third, insurers should offer meaningful discounts to customers who meet or exceed home hardening and fire resiliency standards.

We also urge the Legislature to pass Senate Bill 495, which would allow policyholders who lose their homes to claim 60% of personal property coverage without itemization–or up to 100% with itemization–to speed up recovery, and we urge insurance providers to proactively implement this policy.

We support increased transparency and accountability, including efforts to create a set of best practices and a state-issued insurance report card that scores insurers on claims handling, speed, and customer service.

And, finally, we urge Commissioner Lara’s Smoke Claims and Remediation Task Force to move swiftly in developing long-overdue insurance coverage standards for the testing and remediation of smoke-damaged homes.

This past January, Los Angeles endured the worst natural disaster in its history. Families are doing everything they can to rebuild their lives–a reality they never anticipated. The last thing they need is a second crisis at the hands of the insurance industry. It’s time for the insurers and regulators to step up and meet the moment with urgency, compassion, and action.