Insurance Firms Get Good Grade on Fire Response

State Insurance Commissioner John Garamendi, often a critic of the industry he regulates, said that insurance companies have been “behaving properly” in “the great majority of cases” arising from last October’s wildfires.

Garamendi said a compilation of complaints reaching the Department of Insurance taken toward the end of January showed that there had been 123 complaints involving the more than 3,700 homes totally lost in the fires.

This rate of about 3% is considerably less than was the case in the Oakland fires of 1991, the commissioner said. The Oakland fires burned 2,900 homes, but complaints aimed at insurance companies topped 1,000.

The executive director of the industry’s Insurance Information Network of California, Candysse Miller, said a survey of 65% of the insurance market had shown that, as of the end of last year, 9,282 of 11,685 damage claims filed had been completely settled.

Miller said the survey had confirmed that $1,053,588,104 had been paid out to victims by the insurance companies.

“So far, it looks like a model response,” Miller said.

Garamendi said many of those claims involved cars, losses of other property and partial losses of homes, not the total losses.

Based on this, and on the fact that only 65% of the market was involved in the private survey, the commissioner said he assumed that total damage payouts eventually would reach about $2 billion.

The top six types of the consumer complaints concerned claims that insurance firms hadn’t provided adequate coverage (24), delays and denials of additional living expense allocations (20), delays in determining the scope of the loss (17), delays in dwelling loss payments (14), delays in reaching settlements (14), and cancellations of coverage (14), according to Garamendi’s figures.

Sixty-six of the complaints came from San Diego County, 48 from San Bernardino County and five from other counties, including two from Los Angeles County.

Garamendi said he believed some of the good behavior by the insurance companies, as compared with their actions in some past disasters, could be attributed to the industry’s having heeded state warnings that it should be understanding and flexible in handling claims.

But industry representatives said the insurers had been determined to be accommodating and were proud of their success.

Bill Sirola, a California spokesman for State Farm, the largest seller of homeowner insurance in the state, said: “Our claims representatives in the field have been encountering very, very few problems -- remarkably few.”

He compared the situation with that prevailing in the 1993 Laguna Beach wildfires, when insurers were credited by officials with having improved their performance compared with the responses to Oakland blazes, where insurers finally upgraded hundreds of policies to deal with underinsurance problems, but only under considerable pressure.

Garamendi said he would be back in the fire areas in April with a repeat of the public hearings he held soon after the fires, to check on continuing performance.