When Mark and Lynette Adelson's 50-year-old home on the edge of the San Bernardino mountains was incinerated by the wildfires, the couple thought their insurance would cover the construction of a new one.
Then Mark checked the details of their policy with State Farm Insurance Cos.
"It does not provide for upgrades to the current building code," he said glumly. "It's kind of a lesser tier of coverage."
That means the Adelsons may have to come up with thousands of dollars to cover the difference in costs between, say, an old-style roof or chimney and newer models that are up to code.
Adelson's dismaying discovery is likely to be shared by many homeowners affected by the fires of the last two weeks.
Nearly 3,500 houses were lost to the blazes that torched almost 750,000 acres in Southern California. Insured losses are expected to far exceed $1 billion.
John Garamendi, California's insurance commissioner, said he was assessing whether homeowners would have enough insurance coverage to rebuild.
But based on past experiences, he predicted: "Two or three weeks from now, many people will be outraged, as their losses sink in, over details of insurance and other aspects of their relief."
That's what happened after the Oakland Hills fire of 1991, which wiped out 2,900 homes at an insured cost of $1.7 billion. Some of those homeowners learned that their insurance was inadequate because their coverage amount had not been updated for inflation; others discovered that the so-called full-replacement guarantees from insurers had loopholes.
But pressure from policyholders, lawyers, consumer groups and state officials built up to such an extent that major insurance firms voluntarily upgraded hundreds of policies, giving homeowners many thousands of dollars more to rebuild their dwellings.
Will that happen this time around?
Executives at California's top three home insurance companies -- State Farm, Farmers Insurance Group and Allstate Corp. -- say it's too early to talk about offering something like that. But they generally frowned on the idea.
"It's not wise to go beyond the contracts we have except in really extraordinary circumstances," said Stan Smith, executive vice president in charge of property-casualty lines for Farmers Insurance, which on Friday had more than 1,500 claims from the Southern California fires.
"Any additional money we'd pay would come out of our other policyholder premiums, so this has a double edge," he said.
Some observers think the latest fire victims won't have it as hard or find as many surprises as policyholders after the Oakland fire and the Northridge earthquake in 1994.
Dan Dunmoyer, an insurance industry lobbyist in Sacramento, noted that since the early 1990s, insurance companies have been required to make fuller prior disclosure of the limits of policies. What's more, he said, insurers have developed a better awareness of what is required in coverage to provide adequate replacement financing.
The lobbyist cited statements by Laguna Beach officials that those affected by a brush fire that destroyed 300 homes in the beach resort -- two years after the Oakland fire -- were largely satisfied with their insurance payouts.
Still, government officials, consumer activists and others seemed to be preparing for what they saw as a possibly protracted struggle over the amount of insurance relief for homeowners affected by the fires in Southern California.
Garamendi noted, for example, that many insurance companies have changed the provisions of policies away from concepts of "full replacement guarantees" to "extended coverages with caps." But he asked, are these adequate?
Amy Bach, executive director of United Policyholders, which organized and successfully lobbied for voluntary upgrading of policies after the Oakland fire, said: "I don't think the underinsurance problem has been solved."
In fact, Bach said, it could be worse this time.
"The companies may try to use the new language they have incorporated in their policies referring to extended coverages as a shield to avoid paying necessary remuneration." As such, she said, it could well be that "retroactive upgrades of policies will be the $64,000 question" in the Southern California wildfires. "Will the insurers step up?" she said.
Michael Bidart, a Claremont attorney who was a leading litigator of claims in the Northridge earthquake, said any dispute over the adequacy of insurance policies in the present situation would have to resolve this question: Did the insurance companies give "adequate notice of a reduction of coverage" when they reworded their policies, so that policyholders realized what was happening?
Dunmoyer, the industry lobbyist, said they did disclose all relevant information, noting that it was mandated under the Petris Act that followed the Oakland fire.
To the Southern California fire victims, he pleaded: "See your insurer at least once, before retaining a lawyer."