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Insurers' Demands for Details From Fire Victims Criticized

Some firms require clients to itemize all personal property before claims are paid.

November 23, 2003|Kenneth Reich | Times Staff Writer

Several big insurance companies have come under fire from state officials examining the Southern California wildfires for requiring victims to itemize all their personal property before they could collect on their claims.

State Insurance Commissioner John Garamendi, state Senate Insurance Committee Chairwoman Jackie Speier (D-Hillsborough) and three other legislators said they did not feel it was reasonable for the companies to expect their policyholders to remember so many details about hundreds of individual items.

Speier suggested that legislation might be needed to restrict such questions, and Assemblyman Dennis Mountjoy (R-Monrovia) questioned why the insurer couldn't commit to pay a set amount for personal property in case of total destruction, even before the incident occurred.

The officials spoke out after a San Bernardino homeowner, Hazel Weaver, and her neighbor, Amelia Herman, testified at a state hearing Thursday that they had been driven to distraction by the demands of insurance adjusters after losing their homes to the fires.

"I don't want to be constantly challenged to tell them about every item in every drawer," said a distraught Weaver. "How can I possibly remember every item, the year I bought it and what I paid for it?"

During the hearing Thursday night at San Bernardino City Hall, Speier called several insurance company representatives to the lectern to say whether they required such itemization before honoring claims.

State Farm, Farmers and USAA representatives said their companies did, but Allstate and Safeco representatives said theirs did not.

Gene Livingston, an attorney representing State Farm, said it would be unreasonable to expect a company to pay the maximum for personal contents without an inventory to justify doing so. He said insurance agents often set the maximum at a high figure, such as 75% of the insurance limit on the actual structure of the home, to be sure it was adequate.

"Even the Internal Revenue Service requires an inventory in such instances," Livingston said tartly.

When Wayne Wilson of the Farmers Group of companies suggested that policyholders videotape their homes so they can display their personal items when a disaster, such as a fire, occurs, he drew a sharp response from the insurance commissioner.

"I'm going to zip right home and videotape my property," Garamendi joked. He and other officials present wondered just how many homeowners actually would do something like that.

State Sen. Nell Soto (D-Pomona), also present at the hearing, said she regarded the requests for intricate itemization by the companies as insulting.

"How do you have the gall to demand such details?" she asked. "I've lived in my home for 29 years, and there are things I can't remember."

Speier said her daughter had 300 volumes of children's books, and she asked Farmers representative Wilson whether, in case of a fire at her home, she would be required to list every one, when it was purchased and how much she paid for it.

"You're not going to be required to list each Nancy Drew," Wilson responded.

The hearing, which went late into the night, followed one held by Garamendi and other officials earlier in the day in Lake Arrowhead.

Wayne Austin, general manager of the Arrowhead Resort, said insurers were taking "a pretty tough position" against paying business interruption insurance, despite the fact that visitors to the resort have dribbled away to almost nothing. The decline in business could last into summer, he suggested, since the fires have caused unsightliness along the highways leading to Lake Arrowhead, even though many businesses were not burned.

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