When Dave Wilder and his wife, Lynn, surveyed the remains of their Running Springs house after it burned to the ground in a wildfire near Lake Arrowhead in October 2007, the thing that struck him most wasn't the devastation, and it wasn't the loss of everything they owned.
It was the sound his wife made -- a mournful wail, almost a howl of despair, that echoed through the charred trees on the hillside.
"It was something I'd never heard before, something from deep inside her," Wilder, 61, recalled. "I don't ever want to hear it again."
He thought things couldn't get any worse. He was wrong. Wilder soon learned that the amount of insurance coverage he had was nowhere close to the actual amount it would cost to replace his house.
With more than 1,000 homes lost to flames in recent days, other homeowners may find themselves facing similar "underinsurance" problems.
According to the California Department of Insurance, nearly 39,000 claims were filed after the wildfires that swept across Southern California last October and November. Just over 30,000 of those claims had been settled as of June 20, leaving almost 9,000 unpaid or disputed.
It's not clear how many of those claims involve underinsurance. As of this week, the Department of Insurance had received 90 complaints from policyholders who said their insurance did not adequately cover their losses from last fall's fires. But officials say many underinsurance cases may not result in complaints to regulators.
"It's not the vast majority of claims, but it's not insignificant," said state Insurance Commissioner Steve Poizner. "This is a very serious issue."
Candysse Miller, executive director of the Insurance Information Network of California, a trade group, said the issue of underinsurance has been blown out of proportion by a relatively small group of unhappy policyholders.
"It happens, but it doesn't happen as often as you might see in the media," she said.
Miller laid much of the blame for underinsurance on consumers who try to keep their costs down by not reporting home improvements to insurers, causing policies to reflect lower replacement costs.
"There are a lot of different reasons why underinsurance can occur," she said. "This is right at the forefront. People just don't want to have to spend more for insurance."
