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The Thomas fire ravaged more than 280,000 acres of California, displacing more than 100,000 citizens. The state of California spent more than $177 million to fight the blaze, and the totals for property damage, agricultural damage, and insurance claims is astronomical. One of the most damaging effects of the Thomas fire was the resulting Montecito mudslide, which claimed 23 lives in Santa Barbara County and destroyed 10% of the homes in Montecito.
Bill SB-917 and What It Means for Insurance Claims
SB-917 would require insurance companies to consider mudslides a possible effect of wildfires. As of now, the insurers have no impetus to cover such losses unless an insurance policy clearly states it will cover mudslide damages from a wildfire. The development of the Montecito mudslide is clear evidence of the causal link between wildfires and mudslides.
According to climate experts, wildfires can make mountain slopes more susceptible to mudslide in a number of ways. The burning of vegetation can loosen the soil, due to the absence of roots that can act as foundations for the ground. Additionally, major wildfires that burn through large swaths of plantlife can transform the soil into a slippery, hydrophobic layer that greatly decreases any absorption of water. The lack of vegetation also prevents the slowdown of rain flow, which can mediate the decreased absorption capabilities of the soil. All of these factors result to form a mudslide known as post-fire debris flows, a phenomenon where rain runoff rushing down mountain slopes picks up any loose dirt, boulders, ash, burned trees, and other debris in its path.
California Insurance Commissioner Dave Jones issued a formal notice to all California property and casualty insurers in January of 2018 reminding them that they must cover mudslide damage if the “efficient proximate cause” of the mudslide was the Thomas wildfire. Most insurance policies exclude flood, debris flows, and mudslide damages from their coverable events. However, the Thomas fire qualifies as a “covered peril” under California state law.
Government Alert System
California citizens in the areas affected by the Thomas fire and Montecito mudslide didn’t receive emergency notifications from Santa Barbara county officials until after the mudslide had already hit. Citizens in the area didn’t receive notice until the mudslide had already begun destroying more than 100 homes in Montecito. Detractors state that the government has a poor system in place for notifying Californians of disasters in time to evacuate. More criticisms erupted after the October 2017 fires that swept through Napa Valley claimed more than 40 lives. Policymakers and state officials are working on creating a new emergency alert system that will reach more citizens in a more effective manner.
Understanding How Insurance Claims Work
Insurance companies use different methods for calculating a policyholder’s damages. Property damage is the most common claim after a fire or mudslide, and insurance adjusters look carefully at claimant policies to determine which damages the policy covers and which are not covered. An insurance policy will also contain verbiage that dictates what qualifies damages as “total losses,” or irreparable damages that require complete replacement.
For example, a homeowners insurance policy will likely contain a value for the policyholder’s home. If the policy states the home’s total value at $100,000, but the total cost of the damages eclipses this figure, the insurance provider will consider the damaged home a “total loss.” If the policy covers total losses it will also contain specific information regarding what type of coverage is possible for total losses.
Causes of the Thomas Fire and Montecito Mudslide
There are two high-profile class action lawsuits in play in California following the Thomas fire and Montecito mudslide. More than 500 citizens are suing Pacific Gas & Electric for their possible negligence that may have contributed to the fire. This lawsuit alleges that Pacific Gas & Electric failed to properly maintain the vegetation near one of their electrical structures, creating a significant fire hazard in a very dry area vulnerable to wildfires.
Another class action lawsuit against Southern California Edison alleges this utility company started the Thomas fire due to construction activities. The plaintiffs claim that Southern California Edison was negligent in its supervision of a construction effort near an area highly susceptible to wildfires. This suit also names the City of Ventura and the Casitas Municipal Water District as defendants for their negligent maintenance of fire hydrants in the area.
It’s clear that both power lines in poorly maintained areas and construction equipment near dry vegetation pose significant wildfire risks in the dry climate of Santa Barbara County.
Possible Insurance Concerns for Victims
Dealing with an insurance company can be a complex and frustrating process, especially when considering significant damages that may only have vague relevance to the specific policy in question. Insurers do have a legal and ethical duty to process claims in good faith. They also have the right to fully investigate the validity of a claim and interpret the policy to lower or deny a claim. Insurance bad faith refers to insurance companies engaging in unethical, unprofessional, or malicious activity, and is something to watch for carefully during the claim process.
Anyone who suspects insurance bad faith needs a reliable and experienced attorney. A letter from your attorney to an intransigent insurance company is enough to spur a more mutually agreeable settlement negotiation in many scenarios. It’s also important to keep original copies of all documentation, evidence, and correspondence related to your claim. These records will be invaluable in the event there are any discrepancies between you and your insurance carrier concerning when conversations took place or other details.
Protect Your Rights
If you have suffered losses from the Thomas fire or Montecito mudslide, it’s crucial to know where to turn for legal assistance to protect your rights. Panish | Shea | Ravipudi LLP has secured more than $10 billion in compensation for our Los Angeles clients since our firm’s founding, and we can put our experience and resources at your disposal. Whether you need help filing an insurance claim, need to file a civil action against a negligent party, or have encountered insurance bad faith practices, our attorneys can help. Reach out to our firm today for a free consultation.