Fire Insurance

Stan Newman figures it will cost him close to $400,000 to rebuild his three-bedroom home, which burned to the ground in the fall when a wildfire swept through his neighborhood in the San Diego County community of Rancho Bernardo. But he was stunned when he discovered that his insurer, Amica Mutual Insurance Co., planned to pay him $240,000 for the 1,500-square-foot structure, and no more. That is less than the $304,000 he said he was due, and he is negotiating.

It's the peak of what is now a year-round fire season. And throughout Southern California, homeowners in blaze-prone regions are having a hard time finding fire insurance. Tens of thousands of homes are in the region's brushy canyons, with still more under construction.

Once again, thousands of Southern Californians reeling from days of destructive wildfires have been forced to exercise the home insurance policies they hoped they would never have to use. That it comes at a time of global financial crisis raises a new set of questions: how healthy are the insurance companies that protect homeowners in a region continually battered by fires? And will the current economic climate result in higher premiums?

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.

As Southern California deals with the reality of recurring, destructive wildfires, a sometimes-controversial cottage industry of private response teams has sprung up to help save the homes of well-to-do clients. Such teams were highly visible in the Tea fire, which raged across one of the nation's costliest neighborhoods, destroying 210 homes and damaging nine others. Peter Jacobson believes one of these teams saved his home.

High temperatures and drought conditions are combining to boost fire risks in much of the country, including Southern California. That makes it more important than ever to ensure that your fire insurance is adequate. Home values and construction costs have risen significantly in recent years, and that means homeowners who haven't updated their insurance policies could have grossly inadequate coverage. Others simply underestimate the cost of rebuilding.

Fires sweeping across the Southland should serve as a reminder that everything we value is at risk. The moral: Be prepared. Although some things are impossible to replace, for everything else there's insurance. Here's a primer on fire coverage. What's covered under my policy? The first line on your homeowner's policy "declarations" page shows how much coverage you have.

You buy a Band-Aid. You get a scrape. You use your Band-Aid. And the next time you go to the drugstore, you're told that you have to pay more for Band-Aids. Or maybe they won't sell you another Band-Aid at all. That, in essence, is what seems to be happening in the insurance business. This week we've had two stark reminders of how screwy this industry has become. First, of course, there are the fires that have devastated parts of Southern California.

Bryce Carrier's cellphone rang at 3 a.m.: Help! The fire is almost to my house. Carrier hopped into his heavy-duty red Ford F-550 and sped to northeast Poway, dodging fallen eucalyptus and heading straight toward the wind-whipped blaze. He arrived to find flames marching up an embankment toward the multimillion-dollar home. Yanking out the hose in the back of his truck, he began applying Phos-Chek fire retardant along the perimeter of the property, the shrubs and the roof.

With the threat of flames beginning to ease, residents are drifting back to their devastated neighborhoods. Behind them is Dan Gil, armed with a laptop computer, heavy-duty gloves, a face mask and measuring tape, plus a granola bar and cup of coffee that will last him for the next seven hours.