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A year later, insurance problems beset Napa and North Bay wildfire victims

A year later, insurance problems beset Napa and North Bay wildfire victims


Are homeowners who lost everything in the North Bay wildfires last year finding enough relief to rebuild a year after the devastation? California lawmakers met Tuesday morning at Napa Valley College to find out.

A joint hearing of the state Assembly and Senate insurance committees, joined by state Sen. Bill Dodd and Assemblymember Cecilia Aguiar-Curry, heard from experts on the rebuilding struggles facing homeowners on the path to remaking their old lives.

In the wake of the fires, thousands of destroyed homes pushed insurance claims into the billions of dollars, setting homeowners down a path of recovery that continues to drag on a year later. While several thousand homes are under reconstruction throughout the region, many fire victims are still wrangling with insurers over valuations and the costs of rebuilding.

Tim Larsen, an executive general adjuster with the Greenspan Company, works with consumers to negotiate claim settlements with their insurance companies.

“It’s taking a long time to adjust these claims,” Larsen said, citing a chronic turnover of adjusters on the part of insurers. In many cases, adjusters are assigned by insurance companies to areas and claims based on priority. “They don’t keep these people in place for very long, because next thing you know, there’s another storm in Florida and you have to go there.”

Larsen has seen some claims from the 2017 wildfires go through 10 adjusters over the last 12 months. “Every time you get a new adjuster, you’ve got to reeducate the adjuster on what’s going on with the file and time is lost …. Frankly it’s to the detriment of the insured.”

Larsen alerted lawmakers to another issue stemming from insurers’ use of Xactimate, a program that helps determine the value of house repairs or replacement. Though widely used in settling claims, the program’s valuations are often not in line with the numbers a homeowner would glean from a contractor.

“It’s not reality,” Larsen said. “Often times, the money that Xactimate is coming up with for the rebuild of the home is not sufficient for market conditions.”

In the North Bay and neighboring counties, those market conditions are currently anything but normal, according to panelist Keith Woods.

Woods is CEO of the North Coast Builders Exchange, an association of contractors, architects, engineers and building supply members spread across Napa, Lake, Sonoma and Mendocino counties. The group is headquartered in Sonoma County, where, Woods said, a year after the fires there are two themes.

One is the widely used recovery mantra “Sonoma Strong.” The second, Woods said, is “Sonoma Uncertain.”

“We have fire victims who still in great numbers do not know what they’re going to do. Whether they can afford to rebuild or even want to rebuild for a number of reasons.”

Surveying contractors ahead of the hearing, Woods was told that for projects going up after the fires, the overall costs of building had increased by 20 to 25 percent due to a steep labor shortage across the region. “The magnitude of the disaster has led to competition for labor like we’ve never experienced before,” Woods said.

According to Woods, due to the stresses of cost and efficiency, less than 5 percent of homeowners are rebuilding the same house they lost to the fires.

Location is a key factor in the difficulty and cost of rebuilding, Woods added. Flatter areas like Coffey Park, where 1,300 homes were lost, are markedly easier for contractors to handle, compared to hillside lots. The most efficient process involves homeowners choosing from a set of models offered by the contractor, without any customizations.

Santa Rosa City Councilmember and Vice Mayor Chris Rogers cited two-thirds of Santa Rosans who lost their homes and were underinsured by more than $300,000. More than half of his constituents have yet to find settlements with their insurance that will allow them to begin rebuilding.

More than 1,000 Santa Rosa homes are now under construction, replacing a third of what was lost, Rogers said. But, he added, “Where people are really having a hard time is in getting that number from their insurance.”

And for many, the end of an 18-month period of temporary assistance is now looming.

Rogers pressed for an extension of that period, citing one example of a water system in Fountain Grove that had melted, polluting the area’s soil with benzene. The cleanup lasted an entire year, during which homeowners nearby have been unable to begin reconstruction.

Those residents are now expected to move back into their homes before the assistance period is up. “That’s not going to happen,” Rogers said, accusing insurers of exploiting the deadline.

“In a lot of ways, this 18-month metric is being used to try to leverage settlements faster from my constituents, many of whom are reporting that they are getting low-balled and they feel like they have no options but to sign,” he told the committee.

Rogers urged legislators to revisit bills that the insurance committees introduced last year, including a bill from state Sen. Mike McGuire that would have allowed fire victims to be paid out for the items in their homes that were destroyed, without going through the process of itemizing them.

“That’s the one that I hear more often than not,” Rogers said, “where people want to throw up their hands and say ‘What was the point of having insurance?’”

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Wine Reporter / Copy Editor

Henry Lutz covers the local wine industry. He has been a reporter and copy editor for the Register since 2016.

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