California’s insurance commissioner has issued urgent advice to all residents who have lost their homes and businesses due to the ongoing fires in Los Angeles.
Ricardo Lara warned those affected not to immediately sign anything from insurance companies as they may quickly settle for low offers.
Lara said a little patience during these traumatic times can help fire victims get the full compensation they deserve and also prevent them from falling victim to scams.
Wildfires in the Southern California region have destroyed parts of Los Angeles, including Pacific Palisades where stars like James Woods have lost their homes.
Officials have revealed that at least 2,000 buildings have been destroyed so far.
Lara told ABC7 that residents must first and foremost ensure safety, stay away from the disaster area and not make hasty decisions.
He reminded residents that they are entitled to a three-day reflection period before having to make a decision before a public expert.
“What we’ve often seen, unfortunately, with multiple fires in different years across the state, is that you see outside experts coming in, trying to make a deal with homeowners,” Lara told the program. .
California Insurance Commissioner Ricardo Lara has warned residents against making hasty decisions
Lara said people who have just lost their homes can be vulnerable to fraud during such a stressful time.
Pausing before signing a payout agreement can help people spot potential fraud before it’s too late.
Lara also recommended double-checking an adjuster’s credentials by calling the insurance department and asking for their license.
He also recommended calling their insurance company before signing anything with an adjuster.
“We’re just asking people to call our department and not sign anything under duress,” Lara said.
“This is a very traumatic moment… and we want them to know that we are watching out for fraud, not signing anything, and that we are here to help them through the whole process.
“It’s very important that you know you have someone by your side,” he told the residents of Los Angeles.
Lara advised those affected to keep a copy of their home insurance policy safe and take note of any additional living expenses that have arisen since the start of the fire.
Five major fires were still burning in the Los Angeles region on Thursday
Academy Award-winning actor James Woods is among the stars who have lost their homes
A firefighter battles the Palisades Fire as it burns during a storm on the west side of Los Angeles
He also advised to carefully record all contacts with the insurer and the claims adjuster.
The California Department of Insurance can be reached at 1-800-927-4357 or insurance.ca.gov.
California is in the grip of an insurance crisis as major providers have refused to renew their policies or offer coverage to new customers as the effects of climate change make extreme weather events more common in the state, making it harder to cover losses.
According to analysts at JP Morgan, the payouts from the fires could cost insurers about $10 billion.
“I’ve been in the insurance business for almost a decade and this is the worst thing I’ve ever seen,” Nick Ramirez, an agent with Goosehead Insurance, told the Wall Street Journal.
Insurance officials have said the economic damage, which AccuWeather estimates could be as much as $57 billion, could be comparable to the fires that will ravage Maui in 2023.
Insurance companies recently received the green light from the state to increase costs by as much as 40 percent.
The change came after State Farm gave California an ultimatum, threatening to eliminate coverage if the insurer couldn’t raise home insurance rates by millions.
This will be the first time insurers can pass the costs on to California consumers, which is common in all other states.
However, consumer advocates warn that this change will likely lead to immediately higher prices for homeowners, many of whom are already struggling to pay rising premiums.